Ghana’s Monetary Policy Committee (MPC) has decided to keep the country’s Policy Rate unchanged at 27%, citing improved domestic macroeconomic conditions.
Governor Dr Ernest Addison, speaking at the MPC’s 122nd press conference in Accra on Monday, January 27, noted that global economic conditions had improved over the past year, with easing inflationary pressures in many countries. This, he said, had led to a more accommodative monetary policy stance globally, which is expected to improve investor sentiment towards emerging markets, including Ghana.
Dr Addison also mentioned that the international outlook for 2025 was positive, with stronger-than-expected US economic growth contributing to a stronger US dollar. He warned that this could have implications for emerging markets and called for careful fiscal and monetary policies to avoid potential spillovers to Ghana’s economy.
On the external sector, Dr Addison reported sustained growth in gold exports, contributing positively to Ghana’s reserve buffers and currency stability. He indicated that while commodity prices remained favourable and external sector conditions were strong, challenges in the energy sector still posed risks to the outlook.
The governor also highlighted improved macroeconomic conditions in Ghana, which have positively impacted the banking sector. However, he noted that banks with capital gaps would be required to meet their recapitalisation commitments, and supervisory activities would be ramped up to address high non-performing loans (NPLs), which could threaten financial stability.
Inflation, which has remained high, was largely driven by food price increases due to climate-related factors, such as dry spells and delayed rains. Despite inflation deviating from the target in 2024, the Bank of Ghana expects a gradual return to the disinflation path, contingent on fiscal consolidation efforts by the new administration.
In conclusion, Dr Addison confirmed that the MPC had decided to maintain the policy rate at 27%, citing the ongoing improvements in Ghana’s economic conditions and the global outlook.
Source:TheDotNews