• The Committee commenced its scheduled meeting from September 22 to September 24, 2021
• The policy rate determines the rate at which the central bank lends to commercial banks
The Bank of Ghana (BoG) has on Monday, September 27, 2021, announced that the monetary policy rate remains unchanged.
The central bank kept the policy rate at 13.5% at their 102nd meeting in Accra.
This is the third time the policy rate has been maintained this year.
The policy rate determines the rate at which the central bank lends to commercial banks. It also influences the interest rate on loans.
The Bank of Ghana Governor, Dr Ernest Addison, in a press conference Monday, September 27, 2021 said, “Inflation has risen sharply over the last two readings, driven mainly by sustained food price increases. Although food inflation has pushed overall inflation close to the upper limit of the band, core inflation remains relatively subdued. In the view of the committee, the increase in inflation is mainly due to food inflation which is expected to abate with the onset of the harvest season."
"This notwithstanding, the latest forecast indicates that inflation will remain within the medium term target band but closer to the upper limit in the near term, in the absence of further unexpected shocks,” he added
“A close monitoring of the inflation situation is however warranted to respond swiftly to the potential second round effects on headline inflation from the rising food inflation. The committee stands ready to respond appropriately a needed if this particular risk materializes. Given these considerations, and fairly balanced risks to inflation and growth in the outlook, the committee decided to keep the policy rate at 13.5 percent,” the Bank of Governor announced.
At the 100th MPC meeting, the central bank, for the first time since March 2020 reduced the policy rate to 13.5 percent.
That was a 100 basis points reduction in the rate, which had been kept unchanged at 14.5% percent for at least six consecutive times.
The 13.5% policy rate was maintained at the 101st meeting in July this year.
