The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained its policy rate for the third consecutive time this year at 29%. The decision was made at the 118th MPC meeting which concluded on Monday, May 27 with the announcement of the decision. Speaking at the end of the MPC meeting on Monday, Chairman of the MPC and Governor of Bank of Ghana (BOG), Dr. Ernest Addison, indicated that the policy rate was maintained considering several movements in the economy including the slowdown in disinflation over the first quarter of the year. Inflation currently stands at 25% as at April 2024 falling from 25.8% recorded in March. According to Dr. Addison, the slowdown in the disinflation process was driven largely by rising food inflation mainly seasonal food crops.

Notwithstanding the sluggishness in disinflation, he added, all the core measures of inflation monitored by the central bank continued to ease. However, by isolating price increases of energy and utilities from the consumer basket, core inflation moderated to 24.8% in April 2024 from 26.3% in March.

The MPC also noted pressures in the foreign exchange market as reflected by increased demand for higher imports, energy sector payments and uncertainty surrounding the progress of debt restructuring negotiations with external creditors, which have fed into sentiments and contributed additional pressures. The Committee warned against speculation which it said has contributed to the weakening of the Ghanaian Cedi to major trading currencies particularly the United States Dollar.

“The Bank has enough foreign exchange reserves to support the market and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs.” Dr. Addison said

The BOG also said it has worked with the Ghana Association of Banks to streamline documentation requirements for foreign payments to minimise the incentive to resorts to the informal markets. Therefore, It has taken steps in the past few weeks to directly intervene in meeting the foreign exchange needs of some corporate institutions which according to the central bank “has led to a reduced pipeline demand for foreign exchange from the commercial banks.”