The Bank of Ghana (BoG) has reduced its Monetary Policy Rate by 200 basis points, bringing it down to 27%.
This marks the second rate cut since 2021, aimed at easing borrowing costs and reflecting a decline in inflationary pressures.
The rate had remained at 29% for nine months after being lowered from 30% in January this year.
This reduction is expected to offer some relief to borrowers, at least for the next two months.
During the 120th Monetary Policy Committee press briefing on Friday, September 27, BoG Governor Dr. Ernest Addison explained that the rate cut reflects recent improvements in inflation and the overall economy.
“In the Committee’s assessment, preliminary data since the July 2024 MPC meeting shows significant macroeconomic improvements. Headline inflation has eased, and economic growth has strengthened.
“Fiscal policy implementation has been robust, supporting growth, while monetary conditions have remained tight to facilitate the disinflation process. Headline inflation has declined for five consecutive months by 5.4 percentage points, while core inflation has dropped by 6.9 percentage points over the same period, indicating that the disinflation process is on track.”
“The latest projections suggest inflation will continue easing towards the target range of 13-17% this year, with expectations to reach the medium-term target of 6-10% by the end of 2025, assuming no unforeseen shocks. The Committee judged the risks to inflation as balanced.”
“Taking these factors into account, the Committee decided to reduce the Monetary Policy Rate by 200 basis points to 27.0%.”
Source: Adomonline
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