MPC to continue pause on policy rate hike despite 130bps rise in inflation
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) is expected to maintain its policy rate at 29.5% at its upcoming 113th meeting.
The expectation of a continued pause on the policy rate by the MPC as noted by research lead at GCB Capital, Courage Boti, is despite a 130 basis points (1.3%) increase in headline inflation in the last two months.
According to Mr Boti, the MPC is expected to maintain its policy rate on the basis that core inflation appears to be broadly contained, and the balance of risks weighs more heavily on near-term growth than inflation amidst the stringent austerity environment.
Additionally, interbank cedis liquidity levels are beginning to tighten, as reflected in the marginal increases in the interbank interest rate over the last five weeks.
“Accordingly, we expect the Monetary Policy Committee to hold the policy rate at 29.50% in support of growth and general economic activity as we expect the disinflation process to resume in July 2023,” he posited.
The Bank of Ghana’s Monetary Policy Committee (MPC) is gearing up for its 113th Regular Meetings scheduled to take place from Wednesday, July 19, 2023, to Friday, July 21, 2023.
These high-stakes meetings serve as a crucial platform for in-depth analysis of the current economic situation and review of developments that will guide future policy decisions.
The MPC’s mandate encompasses a comprehensive assessment of a range of economic indicators, including inflation rates, GDP growth figures, exchange rates, and other relevant factors.
These indicators play a pivotal role in shaping the monetary policy decisions that are instrumental in steering Ghana’s economic course.
