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This decision, made during the bank's Monetary Policy Committee (MPC) meeting, underscores the bank's cautious stance in balancing growth and inflation control.
The BoG reiterated its stance on the prime rate at the 117th Monetary Policy Committee (MPC) press briefing held in March.
The Governor of the Bank of Ghana, Dr. Ernest Addison, officially declared the decision to uphold the policy rate at the 118th MPC press briefing conducted on Monday, May 27, 2024.
The new policy rate follows the review of macroeconomic developments in the country for the past two months by the MPC.
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The policy rate, which is the interest rate at which the central bank lends to commercial banks, serves as a critical tool in managing monetary policy.
By keeping the rate unchanged, the BoG aims to curb inflation while supporting economic stability.
The inflation rate in Ghana has remained high, driven by factors such as rising food and energy prices, currency depreciation, and global economic disruptions.
As of the latest data, inflation is hovering around 40 percent, significantly above the central bank’s target range of 6 to 10 percent.
The decision to maintain the policy rate at 29 percent indicates the BoG's focus on containing inflationary pressures, which, if left unchecked, could erode purchasing power and destabilize the economy further.
The high policy rate is intended to make borrowing more expensive, thereby reducing spending and investment, which in turn should help to lower inflation.