The Monetary Policy Committee (MPC) of the Bank of Ghana, by a majority decision, has raised the policy rate by 100 basis points to 28%.
In addition to the adjustment in the policy rate, the Bank is implementing complementary measures to strengthen liquidity management and enhance monetary policy transmission.
Dr. Johnson Asiama, Governor, Bank of Ghana, said the Bank would introduce a 273-day instrument to augment the existing sterilization toolkit.
The Governor was speaking at the 123rd MPCs press briefing in Accra on Friday.
He said the Bank would also intensify the monitoring of banks’ Net Open Positions to ensure compliance and review the current structure of the Cash Reserve Ratio (CRR) to assess its broader impact on liquidity conditions and financial intermediation in the economy.
He said as inflation becomes firmly anchored, the Committee would reassess the scope for a gradual easing in the policy stance.
He said the Committee noted that the global environment had become more challenging, reflecting trade and economic policy uncertainty.
He said the series of tariffs announced by the U.S. administration was evolving and might have negative effects on the global economy.
He said the persistence of these external headwinds might spill over to the domestic economy through the trade and financial channels, highlighting the need for policy to remain proactive.
He said on the domestic front, early indications point to improved growth prospects.
The Governor said the Bank’s CIEA rebounded, and the Ghana Purchasing Managers’ Index moved above the 50-benchmark in February, implying increases in new orders by companies.
“Both business and consumer confidence have improved, and private sector credit growth was recovering and these developments suggest a positive outlook for the economy,” he said.
GNA