BoG to announce monetary policy rate today

• 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) will, on Monday, September 27, 2021, announce the monetary policy rate that influences the interest rate on loans.

The policy rate also determines the rate at which the central bank lends to commercial banks.

This comes after the Monetary Policy Committee (MPC), from September 22 to September 24, 2021, began its scheduled meetings to review economic developments of the country.

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.

The Bank of Ghana Governor, Dr Ernest Addison cited the increase in public debt stock and inflation risks as the reasons for this decision.

Dr Ernest Addison furthered that, 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 central bank also added that it was also concerned about revenue underperformance and the government exceeding the budget deficit for the first five months of 2021.

“With public debt hitting 76.6 per cent of GDP in May 2021, largely underpinned by revenue underperformance, it calls for a 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.