The Bank of Ghana’s Monetary Policy Committee (MPC) has increased the policy rate from 27% to 28%.
The announcement was made at the conclusion of the 123rd regular meeting of the MPC, held on Friday, March 28, to assess recent economic developments and risks to the inflation outlook.
The new policy rate will serve as the interest rate at which commercial banks can borrow from the central bank or the rate at which the central bank pays interest on deposits held by commercial banks.
“Under the circumstances, the committee, by a majority decision, decided to raise the monetary policy rate by 100 basis points to 28.0 percent to re-anchor the disinflation process,” a statement from the central bank said.
It further noted, “As inflation becomes firmly anchored, the committee will reassess the scope for a gradual easing in the policy stance.”
In addition to the adjustment in the policy rate, the Bank of Ghana is implementing complementary measures to strengthen liquidity management and enhance monetary policy transmission.
To achieve this, the bank says it will introduce a 273-day instrument to augment the existing sterilization toolkit, and intensify the monitoring of banks’ Net Open Positions (NOPs) to ensure compliance.
It will also review the current structure of the Cash Reserve Ratio (CRR) to assess its broader impact on liquidity conditions and financial intermediation in the economy.
