BOG keeps policy rate at 27% to tame currency and inflationary pressures

The Bank of Ghana’s Monetary Policy Committee (MPC) has maintained the policy rate at 27%, following its reduction from 29% in September 2024. The decision aims to anchor inflation expectations and stabilize exchange rates amidst economic challenges.

Inflation remains elevated due to rising food prices, exchange rate pressures, fuel costs, and utility tariff adjustments, stalling the disinflation process.

Average inflation forecasts for the next year have increased from 19.0% to 20.1%, with inflation projected to return to the target band of 6-10% by Q4 2025 instead of Q3 2025.

The MPC emphasized that a strengthened currency is vital for controlling inflation and aligning policies with the ongoing IMF program, prompting the decision to hold the rate steady.