Monetary Policy Committee of Bank of Ghana reduces policy rate

Monetary Policy Committee of Bank of Ghana reduces policy rate

- The Monetary Policy Committee of the Bank of Ghana has reduced the policy rate from 16% to 14.5%

- The committee explained that it took the decision because of the ongoing economic challenges posed by the coronavirus outbreak

- It also noted that the fall in global prices could negatively affect Ghana's crude oil revenues

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Bank of Ghana’s Monetary Policy Committee (MPC) has reduced the policy rate to 14.5%, has learned.

The reduction is a 150 basis point reduction in the rate, which was initially 16% and remained unchanged for a long time.

The policy rate is the rate at which the Bank of Ghana lends to commercial banks; it also helps to determine the rate customers would pay on loans from banks.

READ ALSO: Bank of Ghana says Ghana's debt stock has increased by 25.93%

The MPC explained that the decision was reached due to the ongoing effects of the coronavirus on a wide range of economic activities.

According to the Central Bank, the overall fall in global demand could adversely affect Ghana’s crude oil export earnings. reports that it added that there could be serious implications for foreign inflows and tax revenues.

The Central Bank went on to say there is also the possibility of export restrictions from advanced economies as well as emerging market economies.

This, it went on, could create shortages in the supply chain and negatively affect Ghanaian businesses.

It has also been estimated that there would a drop in the revenue from domestic producers or traders owing to the shortage of some commodities.

Ghana’s economic growth, the MPC noted, is therefore expected to reach 5% by the end of the year 2020.

Meanwhile, the Bank of Ghana (BoG) has revealed that mobile money transactions that are valued at GHC100 and below would attract no charges.

The directive is expected to last for three months and is subject to review, the Central Bank indicated.

It takes effect from Friday, March 20, 2020, and is designed to help with the fight against the coronavirus epidemic.

It is hoped that the move would help facilitate payments and promote digital forms of payment.

A statement from the BoG indicated that the plan includes transactions on the same as well as different networks.

READ ALSO: Funds from coronavirus would come from IMF and World Bank - Finance Minister

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