Bank of Ghana keeps policy rate at 16% for the fourth time running

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained the policy rate at 16%. 

Governor of the Bank of Ghana, Dr Ernest Addison

Addressing the media on Friday (September 20, 2019), the BoG Governor, Dr Ernest Addison said the decision was as a result of some threats to the country’s economic growth and inflation outlook.

He explained that the policy rate was kept unchanged as a precautionary measure to allow the bank to rein in inflation which could inch up on the back of a recent increase in transport prices.

He added that the MPC was concerned about the fiscal situation and its impact on revenue. Dr Addison said the committee, therefore, had to be careful in reviewing the policy rate. 

This is the fourth time this year that Bank of Ghana has kept its rate unchanged, since January this year.


This development is expected to have little impact on the cost of credit reducing significantly.

Impact of recent rebased inflation rate on monetary policy 

Meanwhile, the Ghana Statistical Service (GSS) has rebased the reference period from 2012 to 2018.

By this, the GSS has changed the reference period for calculating the inflation rate to 2018 from the previous 2012.

Many people expected that the recent rebased inflation rate of 7.8% and the pickup in GDP estimates should have an impact on the policy rate. 


However, Dr Addison said it may too early to respond to these developments. He explained that they need some time to respond adequately to this development. 

He, however, added that there might be the need to review its medium-term outlook for inflation targeting going forward.

Credit conditions going forward

Dr Addison added that he is optimistic that following the banking sector clean-up, cost of credit should start reducing very soon, adding that "already the microfinance and savings and loans firms have started dropping their rates and we are looking forward to further reduction."


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