The Bank of Ghana (BoG) has reduced its Monetary Policy Rate by 100 basis points from 30 to 29 percent.
Governor of the Bank of Ghana, Dr. Ernest Addison said the the decision was taken following a steady decline in inflation from 54.0% in December 2022 to 23.4% in December 2023 though there are downside risks.
The Governor was speaking at a press briefing after the 116th Monetary Policy Committee (MPC) meetings held from Tuesday, January 23, 2024, to Friday, January 26, 2024.
"The latest forecast suggests that the disinflation process will continue, and headline inflation is expected to ease to around 13-17% by the end of 2024, before gradually trending back to within the medium-term target range of 6-10% by 2025. These forecasts notwithstanding, there are upside risks to the inflation outlook and there is need for strict implementation of the 2024 budget and a tight monetary policy stance to sustain the disinflation process".
"The Committee noted the emerging recovery but sees the need to maintain a strong policy stance to consolidate the disinflation gains. Under these circumstances, the Committee decided to reduce the Monetary Policy Rate by 100 basis points to 29.0%", the Governor added.
Overall, the MPC noted that global growth had remained relatively subdued in 2023, while the ease in global inflation had triggered a pause in monetary policy tightening across key economies.
On the domestic economy, the Governor speaking on behalf of the MPC said there are clear indications that the current macroeconomic framework being implemented with the support of the IMF ECF programme is yielding positive results, adding, the macroeconomic fundamentals have all trended in the right direction.