BoG Reduces Monetary Policy Rate To 29%

The Bank of Ghana has lowered its Monetary Policy Rate by one percent. In effect, the rate that commercial banks use as a reference for lending has been reduced from 30 to 29 percent after six months.

The rate has remained at 30 percent since July 2023 to keep inflation under control.

The business community and industry players had called for a rate drop to boost operational activities and expand credit to the private sector.

At its 116th monetary policy announcement today, the Bank of Ghana cited a significant decline in inflation, a stable currency rate, and relatively strong economic growth on both the domestic and global levels as reasons for the cut.

Governor, Dr. Ernest Addison, added that although the ease in inflation indicates the efficiency of its inflation-targeting framework, it will continue to monitor developments and respond appropriately to tame the elevated risks of inflation.

He said, “Although major central banks have paused on their policy red eye due to declining inflation, global financing conditions remain tight as the paused effects of the restricted policies continue to keep borrowing costs high.”

He added that the global commodities market is significantly impacted by geopolitical tensions, which act as a significant risk factor, making the global picture unpredictable and affecting most economies.

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