Bank of Ghana Lowers Monetary Policy Rate

Bank of Ghana Lowers Monetary Policy Rate to 27% Amid Inflationary Easing

Breaking: World Bank deposits $300 million loan into BoG account. Get all the essential details you need to know about this significant development.

The Bank of Ghana (BoG) has reduced its Monetary Policy Rate by 200 basis points, bringing it down to 27%. This is the second rate cut since 2021, aimed at offering relief to borrowers and reflecting the easing of inflationary pressures in the country.

Previously, the policy rate was held at 29% for nine consecutive months, following a reduction from 30% earlier in January 2024. This latest cut is expected to provide some respite for borrowers over the next two months.

During the 120th Monetary Policy Committee (MPC) press briefing on September 27, BoG Governor Dr. Ernest Addison explained that the decision was driven by improvements in the macroeconomic environment, including a decline in inflation and an uptick in economic growth.

Dr. Addison highlighted that recent data shows headline inflation has decreased consistently over five months, dropping by 5.4 percentage points, while core inflation has seen a sharper decline of 6.9 percentage points. These trends, according to the Governor, indicate that the disinflation process is progressing well.

Projections from the Bank suggest that inflation will continue to ease toward the targeted range of 13-17% by the end of 2024, and could fall further to the medium-term target of 6-10% by the end of 2025, barring any unforeseen economic shocks. The committee has assessed the risks to the inflation outlook as balanced at this time.

Recommended Articles: