Bank of Ghana’s MPC Begins 122nd Meeting to Address Economic Challenges
The Monetary Policy Committee (MPC) of the Bank of Ghana will commence its 122nd meeting today, January 22, 2024, to assess the economy and outline measures to ensure macroeconomic stability. The three-day meeting, which is the first for the year, will conclude with a policy announcement on Monday, January 27, 2024.
The current policy rate is 27%, following a reduction in November 2024. The business community is hopeful for another rate cut to alleviate borrowing costs, which continue to constrain investments and growth. However, concerns persist about the disconnect between lower policy rates and high lending rates.
Inflation remains a pressing challenge, with the government missing its 2024 year-end inflation target of 15%. Inflation rose to 23.8% in December, driven by escalating food prices and prior currency depreciation. Businesses are also keeping a close watch on potential measures to stabilize inflation and curb exchange rate volatility.
During the November MPC meeting, Bank of Ghana Governor Dr. Ernest Addison highlighted the inflationary challenges, noting that projections showed elevated levels due to high food prices, exchange rate pass-through, fuel prices, and utility tariff adjustments. The November rate cut was motivated by disruptions to the disinflation process caused by a weakening cedi and rising food prices.
As the MPC convenes, businesses are looking for decisive actions to address inflationary pressures and stabilize the exchange rate. Clear signals of relief from the central bank could support investment and economic recovery in the months ahead.
