Bank of Ghana keeps its policy rate at 16 percent, the sixth time since January 2019, here’s why

The Bank of Ghana has kept its policy rate at 16 percent.

Dr Ernest Addison, Bank of Ghana Governor

This is the sixth time the central bank has kept its rate unchanged; since January last year.

Bog captured this in its Monetary Policy Committee report.

The move confirms the predictions of some analysts and economists that the policy rate would be held at 16% for, at least, the next quarter of 2020.

The maintenance of the policy rate means that yield on fixed income instruments and lending rates would remain relatively the same during the next two months or so.

Speaking after the meeting, the Governor of the Bank of Ghana Dr Ernest Addison cited a positive economic outlook but with inflationary pressures lingering it decides to maintain the policy rate for the sixth consecutive time since it last reduced about a year ago.

He said "Overall, the economy presents a fairly resilient and robust performance with regards to output growth and a strong trade and payments position. The economy is positioned firmly on the path of stability with inflation forecasted to stay within the medium-term target band of 8±2 percent, barring any unanticipated shocks."

Under these circumstances, he emphasised the Committee viewed risks to the inflation and growth outlook as broadly balanced, and therefore decided to keep the Monetary Policy Rate unchanged at 16.0%, while standing ready to take decisive policy actions when necessary to ensure that inflation remains within the target band.

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