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Business News of Monday, 23 May 2022

Source: www.ghanaweb.com

BoG MPC to announce key policy rate decision

Governor of the Bank of Ghana, Dr. Ernest Addison and Chairman of the MPC Governor of the Bank of Ghana, Dr. Ernest Addison and Chairman of the MPC

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The Monetary Policy Committee of the Bank of Ghana is expected to announce its decision taken on the monetary policy rate.

This comes after the Committee last week held its third scheduled meeting to review economic developments in the country from Wednesday May 17 to Friday 20.

Governor of the central bank and Chairman of the Committee, Dr. Ernest Addison will later today, May 23 announce an upward or downward review of the policy rate which will influence the cost of credit in the country for the next two months.

Ahead of the Committee’s decision, some economists and market watchers have been calling for an upward review of the policy rate from its current rate of 17 percent to 19 percent – a move they believe will respond to soaring inflation figures in the country.

For instance, the Institute of Economic Affairs has suggested the policy rate be increased by another 200 basis points to 19.0 percent.

Director of Research of the Institute, Dr John Kwakye in a statement explained that even though it will be a difficult decision for the central bank, the move will help narrow the inflation gap and “also ease to some extent the risk of foreign currency outflows.”

Chief Executive Officer of Databank Group, Kojo Addae-Mensah also believes that a further hike in the policy may be likely in a move to tame down the inflation rate which is currently at 23.6 percent for April – the highest in 18 years.

Meanwhile, at its 105th MPC meeting, Dr. Ernest Addison announced a hike in the monetary policy rate to 17 percent from an earlier 14.5 percent to deal with the current economic conditions which include fiscal pressures, inflation, and exchange rate volatility among others.

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