At its 121st meeting which concluded on Thursday, November 28, the Monetary Policy Committee (MPC) of the Bank of Ghana has decided to maintain its policy rate at 27% owing to inflationary target misses, as the horizon for inflation to get back within the target band of 6-10 percent has slightly shifted forward to the fourth quarter of 2025 from the original forecast period of quarter three of 2025, it said in a statement.

The central bank is however optimistic about the stability of prices in the future with the strengthening of the Ghana Cedi in the near-term. As the MPC noted from its last meeting, “average inflation forecast a year ahead which stood at 19% has increased slightly to 20.1% at this forecast round.” Again, the steepness of price increases in food items in the course of the year; fast-paced depreciation of the Cedi earlier this year, altered the inflation trajectory and stalled the disinflation process.

The statement added, “The rise in inflation has largely been driven by food price pressures and some exchange rate pass-through effects from previous depreciation of the currency. On a year-on-year basis, however, the inflation rate of 22.1 percent for October 2024 reflects an ease in inflationary conditions from the rate of 35.1 percent recorded in October 2023.”

Meanwhile, core inflation, which isolates the price changes of energy and other utility items from the consumer basket, has eased considerably in the course of a year, the MPC has observed. Seeing a rate of decline in core inflation by 14 percentage points, from 36.2% in October 2023 to 21.4% in October 2024, the Bank remains bullish on “Inflation expectations, gauged from the one-year ahead expectations of the financial sector continue to ease over the next year based on the strength of current policies.”