By Kiki TAGOE
The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) is set to close its current meeting with an announcement on the monetary policy rate.
The monetary policy rate, which is the rate at which the central bank lends to commercial banks, is currently pegged at 21 following the MPC’s decision in September to maintain the rate which was set after its July meeting.
In September, BoG Governor, Dr. Ernest Kwamina Yedu Addison, read the MPC statement, saying: “The monetary policy stance has eased in line with declining inflation and underlying inflation pressures since the beginning of the year. At this MPC round however, the Committee decided it was time to pause the easing cycle in view of emerging risks to the inflation outlook, while remaining vigilant and committed to respond and take the necessary policy actions should these initial signs of underlying pressures persist.”
Subsequent to that, however, the rate of inflation has dropped from 12.2% in September to 11.6% in October.
There has been a similar trend for commercial banks’ lending as the average base rate of banks has dropped from 26 per cent to 25.7 per cent.
Analysts, therefore, expect the BoG to, at least, keep the monetary policy rate at where it is if the MPC decides not to reduce it.