The Bank of Ghana (BoG) has raised the policy rate by 150 basis points to 29.5 percent.
The Governor of the Bank of Ghana, Dr Ernest Addison announced the rate hike today, March 27, 2023 when he addressed the media.
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The BoG Governor cited likely risks to the inflation outlook despite the recent moderation and deceleration of inflationary pressures, the marginal stabilisation of the local currency, and near-term forecasts.
“This will be critical in resetting the economy on the path of recovery and sustaining growth. Headline inflation has declined marginally for two consecutive times but continues to remain relatively high compared to the medium-term target of 8+ or -2%.”
“To place the economy firmly on the part of stability, it is important that the Bank of Ghana increases the Monetary Policy rate.”
The prime rate, which is of keen interest to businesses, signals the rate at which the Central Bank will lend to commercial banks.
It also subsequently influences average lending rates on loans to individuals and businesses.
Following the increase in the policy rate, his means cost of borrowing is expected to go up further.