The Monetary Policy Committee of the Bank of Ghana on Monday announced its decision to maintain the monetary policy rate at 20%.
This decision is geared towards ensuring Ghana achieves its medium term inflation target of 8.2% and maintain the inflation target horizon.
According to the committee, there has been a decline in core inflation throughout 2017 with a 550 basis point policy cut.
“In sum, the Committee noted the increased pace of global growth which is expected to continue in 2018, and the relatively subdued global inflation, supporting broad-based accommodative monetary policy stance across the major advanced economies. This has had a moderating effect on global financing conditions with positive implications for emerging and frontier markets, including Ghana.”
The figure pegged at 20% means the central bank will lend money to commercial banks with an interest of 20%.
This may go a long way to cut down the interest rate at which commercial banks gives loans to private citizens.
The lower the MPR the lower commercial banks offer interest rates on loans to private citizens.