The Bank of Ghana has maintained the policy rate at 26 percent again.
The Monetary Policy Committee of the central bank attributed the decision to the reduction in inflation which currently stands at 18.4%.
The Governor of the Bank of Ghana also maintains that inflationary trends for the first half of the year, which he describes as cost push in nature has also largely been influenced by increased the prices of petroleum products, utility prices and foodstuff.
Addressing the media on the decision of the MPC, the Governor, Dr. Abdul Nasir stated that the current economic indicators supported the policy rate being maintained.
This is the fourth consecutive time that the MPC has maintained the policy rate.
At the Committee’s last meeting in May, it attributed the prevailing inflationary trends and the relative stability in the depreciation of the cedi as the major reasons for maintaining the rate.
Meanwhile the central bank says its inflation forecast suggest a slight outward shift due to the increase in ex-pump prices.
“The bank’s latest inflation forecast suggest a slight outward shift in the forecast horizon as increases in ex-pump prices of petroleum products slowed the pace of expected inflation therefore headline inflation is expected to move within the medium term target band of 8 plus or minus 2 in the third quarter of 2017,” Dr. Issahaku observed.
Though the Governor in May was optimistic of achieving the BoG’s inflation target of 8 percent plus or minus 2, he expressed concern over what he referred to as risks that possible hikes in petroleum prices could pose to the end of year target.
Dr. Issahaku also cited distortions in the prices of utility as possible risks to the central bank’s single digit inflation target.
