The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) will today 14th September 2015 announce whether or not it will increase or maintain the monetary policy rate.
Some economists are predicting that the policy rate, which currently stands at 22 percent, could be increased.
The policy rate which is the rate at which the Central Bank lends to commercial banks and is also used by banks to calculate their base rates hit 22 percent in May this year, the highest since December, 2003 when the rate was at 21.50 percent.
The Central Bank maintained that figure at its last meeting in July and attributed its hold to the recovery of the cedi as well as underlying inflationary pressures which was evident in the country’s inflation rate which in July was 17.1 percent after recording 16.9 percent in May.
Inflation in August, however, recorded a decline after increasing over the previous months.
The IMF is, however, pushing for further increases in the policy rate to check inflation. The review in the policy rate is coming at a time when the Bank of Ghana has merged the Monetary Policy Rate and the Reverse Repo Rate to ensure transparency in the monetary policy stance of the bank.
Meanwhile, an economist and senior lecturer at the Economics Department at the University of Ghana Dr Eric Osei-Assibey is projecting a reduction of the policy rate to help drive down interest rates.
