The Monetary Policy Committee of the Bank of Ghana has once again maintained the policy rate at 26 percent.
This is the fourth consecutive time the Committee is maintaining the rate at 26 percent since January this year.
Addressing the media at the concluding part of the 72nd meeting of the MPC, Governor of the Central Bank, Dr. Abdul Nashir Issahaku attributed the decision to the stability in inflation for the period.
Though the country’s inflation has increased to 16.9 percent in August 2016, from the 16.7 percent recorded the month before, Dr. Issahaku believes it formed part of the basis to maintain the rate at 26 percent.
In addition, the central bank has been unable to meet its inflation target of 8 percent plus or minus 2 percent.
At the last meeting in July, the Governor announced that the central bank has shifted the forecast for single digit inflation to the third quarter of 2017.
Economist, Dr. Lord Mensah earlier told Citi Business News he did not expect a change in the policy rate.
“I do not think that now that we are drawing closer to the fourth quarter and the festive season, the MPC will be prepared to reduce the policy rate as there will be pressure on the demand for the dollar. So I am expecting that if we have that reserves, then the MPC will then look at it and maintain the rates,” he stated.
Dr. Mensa further stressed, “If the government realizes its desperation for funds, then I don’t think that they would want to reduce the rates.”
The Bank of Ghana last increased the policy rate in November 2015.
The rate was increased from 25 percent in September to 26 percent in November 2015.
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By: Norvan Acquah-Hayford/citibusinessnews.com/Ghana