Ghana records highest inflation in 18 years at 23.6% for April
Hike in policy rate to affect cost of living – IEA
The Bank of Ghana Monetary Policy Committee has commenced its third scheduled meeting to review economic developments in the country from Wednesday May 17 to Friday 20.
The rather crucial meeting, which will be the 106th of the central bank is expected to entail the initiation of proposals for the formulation of the central banks’ policies, provision of statistical data and economic advice.
Ahead of the MPC meeting, some economists and market watchers are calling for an upward review of the policy rate from its current rate of 17 percent to 19 percent – a move they believe will respond to soaring inflation figures in the country.
For instance, the Institute of Economic Affairs has suggested the policy rate be increased by another 200 basis points to 19.0 percent.
Director of Research of the Institute, Dr John Kwakye in a statement explained that even though it will be a difficult decision for the central bank, the move will help narrow the inflation gap and “also ease to some extent the risk of foreign currency outflows.”
Chief Executive Officer of Databank Group, Kojo Addae-Mensah also believes that a further hike in the policy may be likely in a move to tame down the inflation rate which is currently at 23.6 percent for April – the highest in 18 years.
Meanwhile, Governor of the Bank of Ghana, Dr. Ernest Addison, who is also Chairperson of the Monetary Policy Committee will over the next three days make decisions that will influence the cost of credit in the country for the next three months of the year.
The central bank will subsequently update the press on its decisions on May 23, 2022.
At its 105th MPC meeting, Dr. Ernest Addison announced a hike in the monetary policy rate to 17 percent from an earlier 14.5 percent to deal with the current economic conditions which include fiscal pressures, inflation, and exchange rate volatility among others.
Governor of the Bank of Ghana, Dr. Ernest Addison and Chairman of the MPC