MPC to maintain policy rate at 29.50%; lending rates to remain unchanged

The Monetary Policy Committee(MPC) of the Bank of Ghana is expected to hold the policy rate at 29.50%.

The meeting which is scheduled for July 19 is anticipated to support growth and economic activity, ultimately inducing disinflation by July 2023.

The steady policy rate will mean lending rates will largely remain the same for the next two and half months.

The quarterly meeting which started on Tuesday, July 18 to Friday, July 21, 2023, is to review developments in the economy.

The meetings will conclude with a press conference on Monday, July 24, 2023, to announce the decision of the committee.

The central bank in May 2023 maintained its key interest rate at 29.5% as inflation continued to decline, citing tight monetary policy and stable currency rates as contributing factors.

“The committee further noted the significant decline in headline inflation from the beginning of the year of more than 12.0 percent. The percentage of items in the CPI basket with inflation of more than 50 percent and above is receding, an indication of a strong return to the disinflation path,” it said.

“The tight monetary policy through additional liquidity management operations to address excess liquidity conditions in the market, relative stability in the local currency, and easing of ex-pump petroleum prices have supported the disinflation process”.

“Furthermore, the Bank of Ghana has signed the memorandum of understanding on zero financing to the budget to eliminate fiscal dominance and allow for steer ease in inflation towards the target band. These policies should provide the much-needed anchor to reinforce the disinflation process and reset the economy on the path of recovery”, it added.