BoG Keeps Interest Rate at 27% to Support Economic Recovery
Accra, Ghana - 27 Jan, 2025 - The Bank of Ghana has maintained its monetary policy rate at 27%, citing elevated inflation risks and the need to support the country's ongoing economic recovery efforts.
This decision comes after Ghana failed to meet its 2024 end-year inflation target of 15%, with the rate rising to 23.8% in December last year.
According to Governor Dr. Ernest Addison, the Central Bank will continue to adopt a cautious stance in the face of underlying inflationary pressures and global economic uncertainties.
Speaking at the first Monetary Policy Committee press briefing for 2025, Governor of the Bank of Ghana, Dr. Ernest Addison attributed the elevated inflation profile to food price movements, particularly in the last quarter of 2024, which were driven by climate-related factors such as dry spells and delayed rainfall.
Despite the inflation outturn for 2024 deviating from the target, Dr. Addison expressed optimism that the disinflation process will resume, contingent on renewed efforts at fiscal consolidation.
“The inflation profile remains elevated largely driven by food price movement, especially, in the last quarter of the year. The climate factors including dry spells in some parts of the food-growing communities of the country and the last onset of rains negatively affected production.
“While the supply chain weakens generally affected food prices. While the inflation outturn for 2024 deviated from the target, it is expected that the disinflation process will resume contingent on renewed efforts at fiscal consolidation which is anticipated in the new administration economic policy agenda and the yet-to-be-presented 2025 budget statement.
“The bank’s latest inflation focus shows a steady decline and returns to the path of disinflation with an extended time of rising in achieving the medium target of 8+- 2%. Under the circumstances the committee decided to keep the monetary policy rate unchanged at 27%,” he added.
Source: Lead News Onlne
