The Monetary Policy Committee of the Bank of Ghana (BoG) has reduced the policy rate by 350 basis points to 21.5% from 25%.
He explained that the committee is forecasting inflation to fall again by the end of the fourth quarter.
“The view of the committee was that inflation will continue to ease in the near term. In the outlook, headline inflation is expected to drop within the medium of 8 plus or minus 2% by the end of the fourth quarter”, he said.
“Given these considerations, the Committee, by a majority decision, voted to lower the Monetary Policy Rate by 350 basis points to 21.5%. The Committee will continue to monitor macroeconomic developments and take the appropriate policy decision as and when necessary to reinforce the disinflation process”, he added.
The Electricity Company of Ghana (ECG) for example has made a request to the Public Utilities Regulatory Commission (PURC) for a 225% increase in its Distribution Service Charge.
Notwithstanding this, Dr. Asiama said majority of the committee members voted to lower the policy rate to 21. 5% from the 25%.
Cedi strength
“The cedi remains among the strongest currencies globally, year-to-date. This reflects prudent monetary policy, effective liquidity management, fiscal consolidation and increased foreign exchange inflows “, he said.
He added that the Bank of Ghana is keenly monitoring the performance of the currency and putting in place regulator measures to maintain the stability of the cedi.