BoG hints at tightening of policy rate

The Governor of the Bank of Ghana (BoG) has hinted of a possible tightening in policy rate as the Monetary Policy Committee (MPC) meets on Monday to review the health of the economy.

The MPC is charged with initiating proposals for the formulation of the monetary policies of the bank, providing statistical data and advice necessary for the formulation of monetary policies.

At their last meeting in February the committee kept the rate unchanged at 15 percent, amidst threats to the economy and mounting government debts.

The rate is usually indicates the fee at which commercial banks can borrow from the central bank. It also influences the interest rate charged on loans by banks to their customers.

Speaking to Joy Business, Dr. Hennery Kofi Wampah however said any cut will be dependent on the economic outlook.

The Governor said BoG is happy with current measures, but a review of the situation would inform whether there should be a tightening of the monetary policy rate or not.

Dr. Wampah also adds that Bank is optimistic of achieving its end of year inflation target of 9 percent, despite the sudden hike in rate for last month.

An economist, Prof Peter Quartey, said he is expecting the Bank of Ghana to maintain its policy rate or make a marginal increase because of current pressures on the Ghana cedi.

He explains that Ghana’s economy is “getting slightly heated now given the inflation trends”. He however agrees to some tightening but said it should not be too severe.