The Bank of Ghana has maintained its Monetary Policy Rate at 14 percent, with policymakers warning that emerging external threats could reignite inflationary pressures despite improving conditions in the domestic economy.
The decision was taken unanimously at the conclusion of the 131st meeting of the Monetary Policy Committee (MPC).
Although the Committee said recent inflation developments remained broadly consistent with its forecasts, it noted that headline inflation rose in June, largely due to temporary factors.
The MPC said inflation had moved closer to the lower end of the Bank’s medium-term target range, mainly because of base effects.
It added that inflation expectations and core inflation had increased but remained broadly anchored within the target band.
The Committee maintained its forecast that headline inflation would gradually return to the target range in the coming months.
However, policymakers identified several risks that could put renewed pressure on prices.
These include potential adjustments in utility tariffs and rising geopolitical tensions in the Middle East, which have contributed to higher crude oil prices and increased uncertainty in the global economy.
The MPC said the external risks required continued vigilance and made it necessary to maintain the current monetary policy stance.
On the domestic front, the Committee said Ghana’s economy continued to show resilience.
It cited strong private sector credit growth, improving business and consumer confidence and favourable financing conditions as signs of continued economic activity.
The Bank also pointed to improvements in Ghana’s trade balance and adequate international reserves, which it said would help the economy withstand potential external shocks.
The MPC further said continued fiscal consolidation, together with an appropriately calibrated monetary policy stance, would be important in containing inflation and preserving macroeconomic stability.
“Given these considerations, the Committee, by a unanimous decision, maintained the Monetary Policy Rate at 14 percent,” the Governor announced.
The decision leaves the benchmark interest rate unchanged as the central bank seeks to support economic activity while guarding against potential inflationary pressures from global developments and domestic cost adjustments.
