Bank of Ghana Faces Pivotal Policy Decision as MPC Meeting Begins
The Bank of Ghana’s Monetary Policy Committee (MPC) begins its 123rd meeting today, as policymakers weigh the twin challenges of persistent inflation and financial stability concerns in an increasingly uncertain economic environment.
The three-day deliberations, chaired for the first time by newly appointed Governor Dr. Johnson Asiamah, will culminate in a key policy announcement on Friday, March 28. Investors and businesses are awaiting signals on the future direction of interest rates, given the delicate balancing act between inflationary pressures and the need to support economic growth.
The MPC held its benchmark interest rate at 27% in January, citing entrenched inflation risks. While inflation has moderated slightly, standing at 23.1% in February after averaging 23.8% in 2024, it remains well above the government’s 11.9% target for the year. At the same time, a decline in Treasury bill rates has raised questions over liquidity conditions and investor appetite for domestic debt, adding another layer of complexity to the central bank’s decision-making.
The government has set an ambitious real GDP growth target of 4.4% for 2025, but the macroeconomic backdrop remains challenging. External financing constraints, coupled with concerns over fiscal consolidation efforts, are likely to weigh on market sentiment.
As policymakers convene, a critical question looms: will the central bank maintain its restrictive stance to anchor inflation expectations, or will it shift towards a more accommodative approach to bolster economic momentum?
