MPC Reduces Monetary Policy Rate to 21 Per Cent

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has decided to reduce the Monetary Policy Rate by 150 basis points to 21 per cent.

The Governor of the Bank of Ghana Dr Ernest Kwamina Yedu Addison announced the rate at a news conference in Accra, yesterday after the 77th meeting of the MPC in Accra.

Dr Addison explained that in arriving at the rate, MPC's view was shaped by recent economic developments.

He said MPC was guided by the improved economic activity supported by a rebound in crude oil production, which was expected to remain in line with trends seen in the first half of the year.

According to Dr Addison, BoG's Composite Index of Economic Activity (CIEA) also provided some positive indications of expected increased momentum in economic activity.

He said the broad expectation was that the gradual and steady increases should translate to higher growth profile in the period ahead and that the implementation of fiscal policy measures towards providing stimulus through the key initiatives contained in the 2017 budget statement should provide added impetus to growth.

On disinflation, he said the process was still ongoing and that the trend was likely to continue all through till the end of the third quarter.

Dr Addison said barring any unanticipated shocks, the current stance of monetary policy and expected stability in the exchange rate should ensure price stability and that in the outlook, expectations were that the observed decline in headline inflation would continue and converge towards the medium-term target in 2018.

Source: ISD (G.D. Zaney)

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