The Bank of Ghana’s Monetary Policy Committee (MPC) has increased the Monetary Policy Rate (MPR) by 100 basis points to 28%. This decision was made during the 123rd MPC meeting, where the committee cited concerns over inflation.
Inflation remains above the central bank’s target. To prevent effects from prolonging inflationary pressures, the MPC deemed it necessary to tighten policy.
The rate hike is expected to have economic implications, including borrowing costs for businesses and individuals, currency stability due to liquidity, and a slowdown in credit expansion. The decision may also put pressure on fiscal discipline under the 2025 budget framework.
In a statement, BoG Governor Dr. Johnson Asiama said the need for a monetary policy stance to restore price stability. He noted that debt restructuring talks will help “restore fiscal and debt sustainability and bring down inflation, as well as help stabilize the currency.”
The MPC’s decision marks a departure from the usual stance, with the rate hike being agreed upon by a majority vote. As the economy continues to navigate inflationary pressures, the central bank’s commitment to price stability will be watched.
Ruth Abla ADJORLOLO
