BoG Holds Policy Rate at 29%

The Bank of Ghana (BoG) has maintained its Monetary Policy Rate at 29%, citing a slightly elevated inflation profile due to recent exchange rate pressures and adjustments in transportation fares.
However, the Bank’s projections indicate that inflation will remain within the monetary policy consultation clause of 13 to 17% by the end of the year.
Dr. Ernest Addison, Governor of the Central Bank, made the announcement during a press briefing following the Bank’s 118th Monetary Policy Committee meeting in Accra on Monday, May 27.
The decision to maintain the policy rate was reached after the Committee deliberated and assessed global and domestic macroeconomic developments for the first four months of the year and the balance of risks to the outlook.
Dr. Addison noted that the interbank weighted average rate remained within the policy corridor, increasing to 28.68% in April 2024 from 25.89% in April 2023.
In contrast, the average lending rates of banks declined marginally to 31.25% in April 2024 from 31.66% in the corresponding period of 2023.
“These forecasts are contingent on sustaining the tight monetary policy stance, including aggressive liquidity management operations,” the Central Bank Governor said.
Speaking about developments in the banking sector, he said indicators pointed to a recovery from the impact of the Domestic Debt Exchange Programme (DDEP).
Total assets increased by 28.8% to GH₵306.8 billion at the end of April 2024, driven by domestic currency deposits and other funding sources. Banks also reported higher profits for the first four months of 2024, relative to the same period in 2023.
Regarding gross international reserves, the Governor stated that the country’s position remained strong, with a $6.59 billion stock of reserves representing three months of import cover, compared with $5.91 billion or 2.7 months of import cover at the end of December 2023.
Nonetheless, on the country’s fiscal policy, he noted that expenditures outpaced revenue growth in the first quarter, reflecting the frontloading of Independent Power Producer (IPP) arrears payments.
“Maintaining strict fiscal discipline for the rest of the year will be crucial to strengthen confidence in the economy,” Dr. Addison said.