The Bank of Ghana's Monetary Policy Committee kept the monetary policy rate unchanged at 29% on 25 March 2024, Governor Ernest Addison announced, pausing after a 100 basis point cut in January.
The committee had lowered the rate from 30% to 29% on 29 January 2024, its first reduction of the year. The March decision leaves the benchmark unchanged as the pace of disinflation eases. Headline inflation in Ghana reached 54.1% in December 2022, its highest level in 22 years, before falling sharply during 2023.
INFLATION OUTLOOK
Addison said that, after decelerating sharply in 2023, the pace of disinflation had slowed in the first two months of 2024. Inflation rose slightly in January and edged down in February, when headline consumer price inflation stood at 23.2%.
The governor said the latest forecast pointed to a slightly elevated inflation profile, reflecting possible upward revisions to transport fares, adjustments to utility tariffs, higher fuel prices at the pump and some pass-through from exchange rate depreciation. He described the risks to inflation as slightly on the upside and said they would require close monitoring.
BORROWING COSTS
Money market rates have declined over the past year. The 91-day Treasury bill rate stood at 27.87%, down from 35.67% a year earlier, while the 182-day rate fell to 30.34% from 35.73% and the 364-day rate eased to 30.90% from 34.92%. The average lending rate was 32.7% as of February 2024.