The Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) has hiked its policy rate by 250 basis points to 24.5%.
This indicate that borrowing from banks will become more expensive, as a result the increase in cost of living and conducting business in the country.
Addressing the media, the Governor of the Bank of Ghana, Dr. Ernest Addison, indicated that the decision was made to combat growing inflation as the government negotiates an economic program with the International Monetary Fund (IMF).
“Inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations. The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path,” Dr. Addison said.
The interest policy rate has risen by 9.5% since the Bank of Ghana first raised it in March 2021.
On March 25, 2022, the Central Bank raised the policy rate by 2.5% to 17%, and then again on May 23, 2022, to 19%.
It increased it by 300 basis points to 22% in August 2022.
