Ghana’s central bank has kept is monetary policy rate unchanged at 14.5 percent.
The development comes after the Bank’s Monetary Policy Committee last held week its first scheduled meeting of 2022 to review economic developments in the country.
Explaining the rationale behind its decision, Bank of Ghana Governor, Dr Ernest Addison in a statement outlined key risks to inflation and decisive implementation of fiscal correction measures as its reasons.
“The key risks to the inflation outlook include: rising crude oil prices and its transmission to ex-pump petroleum prices and transportation costs, rising global inflation, food price uncertainties, and the fiscal outlook. The Monetary Policy Committee envisaged this scenario when it raised the policy rate in November 2021 to contain the inherent aggregate demand pressures likely to drive prices in the outlook,” portions of the statement read.
“The Committee is of the view that the dynamics associated with the November 2021 policy rate hike are yet to be fully transmitted and expects the decisive implementation of the fiscal correction measures, especially the 20 percent cut in expenditure to help moderate the upside risks to the inflation outlook,” the Governor explained.
Dr Ernest Addison however said that the central bank's Committee will continue to monitor the impact of these policy measures and will, when necessary, call an extraordinary meeting to re-assess the inflation outlook over the forecast horizon and take the necessary policy decisions accordingly.
“Under these circumstances, the Committee has decided to keep the policy rate unchanged at 14.5 percent,” the Bank of Ghana Governor said.