The Bank of Ghana (BoG) has once again maintained its policy rate at 16 percent.
According to the Central Bank, the decision was based on its Monetary Policy Committee’s assessment that risks to the inflation outlook were broadly balanced.
Governor of the Bank of Ghana, Dr. Ernest Addison, made the announcement to journalists on Monday, November 25, 2019, following the Committee’s 91st Meeting.
He noted that the latest forecast shows that inflation will remain within the target band over the forecast horizon, barring any unforeseen shocks.
“Inflation expectations, derived from the survey’s, remain fairly anchored in single digits and core inflation (excluding energy and utilities) is expected to remain at low levels,” he revealed.
Additional Measures
The Governor explained that in addition to the assessment of macroeconomic conditions, the Monetary Policy Committee undertook a deep review of the banking sector’s lending practices.
“Following the recapitalization of banks, a rebound and gradual pickup in the credit extension by banks is taking place,” he noted.
He said to give impetus to stronger credit growth and facilitate the deepening of the financial intermediation, the Committee sought to better understand the factors that limit access to credit, inhibit the monetary policy transmission process and the reasons for the high lending rates of universal banks.
He recounted that these factors have over the years acted to limit access to credit, kept cost of credit high to households and businesses, and posed challenges to the attainment of higher economic growth.