The Bank of Ghana?s (BoG) Monitory Policy Committee (MPC) has maintained its Policy Rate at 19 per cent.

wpid-Bank-of-Ghana.jpgThe decision, as communicated to the media by Dr Henry Kofi Wampah, Governor of the BoG, on Wednesday, was as a result of a number of considerations.

These, included the expected growth in cocoa and oil output, cash from the Eurobond, the coming on board of gas from the Ghana gas project to address some of the challenges in the energy sector, as well as the provision of support from the International Monitory Fund, which would provide additional balance of payment support.

The Committee at its last meeting in July this year increased the Policy rate from 18 to 19 per cent and attributed its decision at the time to domestic fiscal pressures such as exchange rate fluctuations, price volatility and weakening of some global economies in limited capital inflows.

Therefore after its 61st regular meeting, the MPC considered the risks to growth and inflation and observed that although global growth remains weak, it is expected to rebound soon.

Inflation on the outlook is expected to peak in the near term and likely to stay slightly above the upper band of the revised target of 13.2 per cent by the end of 2014.

?However, inflation is expected to move within the band in the second half of 2015, barring any adverse shocks,? he said.

Dr Wampah said in spite of all the challenges, the Committee observed that, commodity prices remained mixed, particularly with gold prices marginally losing ground, but cocoa prices has recovered, which is a positive development for the external sector going forward.

He said on the domestic front, fiscal pressures and the volatilities in exchange rates continue to pose challenges to the economy.

However , the latest numbers suggest some stability in the foreign exchange market as the early policy measures including the cumulative 300 basis points increase in the monitory policy rate, the 200 basis points increase in the cash reserve ratio as well as the narrowing of the net open positions of the banks, which have worked through the system.

He said ?in addition, the expected inflows from the Eurobond and the cocoa syndicated loan would provide liquidity on the foreign exchange market?.

He said the Committee observed that despite the softened business confidence and heightened inflation expectations, the BoG’s Composite Index Economic Activity however showed strong growth on the back of real private sector growth with modest improvement in consumer confidence.

He said given these considerations, the Committee would continue to monitor developments and take appropriate action when necessary.



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