BoG maintains policy rate at 19%

The Monetary Policy Committee (MPC) of the Central Bank maintained the policy rate to tame the unprecedented rise in prices of goods and services.

The Governor of the Central Bank, Ernest Addison addressing the media on Monday, July 25, 2022, said "A detailed review of the consumer basket shows that although initially driven by supply-side shocks, the initial relative price changes have broadened to almost all the items in the consumer basket.

"Over 80 percent of the items in the basket recorded inflation above 20 percent. Inflation perceptions and expectations, as revealed in the Bank's surveys of consumers and businesses, have increased, and influenced agitations for Cost-of-Living Allowances in workplaces."

"The Committee also noted the deceleration in the rate of increase in inflation in the last reading. The Committee expects that the macroeconomic framework that will underpin an agreed IMF-supported programme will present a stronger coordinated monetary and fiscal policy framework that will anchor stability and prevent a wage-price spiral, which will lead to inflation becoming more entrenched.

"Based on the above assessments, the Committee was of the view that it will be appropriate to pause and observe the impact of the recent monetary policy measures already taken. The Committee, therefore, decided to maintain the monetary policy rate at 19.0 percent," he added.

The Monetary Policy Committee increased the policy rate by 200 basis points to 19 percent after inflation saw a huge jump to 23.6 percent in April from the 19.4 percent recorded in March, which was largely pushed by the rise in fuel prices and its resultant effect on transport fares.