• The outcome of the meeting will determine the monetary policy rate of central bank
• The policy rate influences the interest rate on loans for businesses
The Bank of Ghana has served notice that its Monetary Policy Committee will from September 22 to September 24, 2021, begin scheduled meetings to review economic developments of the country.
The meeting is expected to entail the initiation of proposals for the formulation of the policies of the central bank, provision of statistical data and advice.
Governor of the Bank of Ghana who is also Chairperson of the Monetary Policy Committee will make decisions that will influence the cost of credit in the country for the next three-month period of this year.
Among such decisions will be a review of the monetary policy rate which was at the central bank's 101st meeting kept unchanged at 13.5 percent citing an increase in public debt stock and inflation risks.
In an earlier statement issued by the central bank on Monday, July 26, 2021 at its 101st meeting explained the decision was influenced by threats to the current economic recovery and outlook as a result of a third wave of COVID-19 infections.
The BoG’s MPC added it was also concerned with regards to revenue under performance and government exceeding the budget deficit for the first five months of 2021.
“With public debt hitting 76.6 percent of GDP in May 2021, largely underpinned by revenue underperformance, it calls for monetary policy response that will signal to the market that government is still committed to ensuring fiscal consolidation,” the statement read.
“And again, with an uptick in inflation to 7.8 percent in June from 7.5 percent the previous month, there is the need for further caution, especially, given pressure emanating from the fiscal side. Hence, the decision not to further cut the rate after it did so by a 100-basis point last month,” it added.
The monetary policy rate influences the interest rate on loans and determines the rate at which the central bank lends to commercial banks.
The bank will however announce its latest decision undertaken at its 102nd meeting on September 27, 2021.
The Bank of Ghana Headquaters