- The Bank of Ghana has increased the policy rate by 2.5% to 17%, the first of such increase since 2018
- The BoG cited a myriad of reasons for increasing the policy rate, including the uncertainty about the economic outlook and the war between Russia and Ukraine
- The move is expected to drive down inflation and the depreciation of the cedi against the dollar and other major trading currencies
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The Bank of Ghana has raised the rate at which it lends to commercial banks by 2.5%, from 14.5% to 17%.
This means commercial banks will also increase the rate they lend to their customers in the coming days.
Bank of Ghana’s Monetary Policy Committee (MPC) announced the decision today, Monday, March 21, at a meeting with journalists and key stakeholders.
Governor of the Bank of Ghana, Dr Ernest Addison, explained that the decision to increase the lending rate was informed by current pressures on the economy, the uncertainty about the economic outlook and the war between Russia and Ukraine.
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“Headline inflation has risen sharply to 15.7% in February 2022, and both headline and core inflation are significantly above the upper limit of the medium-term target band.
“The uncertainty surrounding price developments and its impact on economic activity is weighing down business and consumer confidence. The risks in the inflation outlook are on the upside and include petroleum price adjustments and transportation costs, and exchange rate depreciation,” Dr Addison recounted some of the considerations that informed the policy rate increase.
The central bank is hopeful that the move will hold increasing inflation and rapid fall of the cedi against the dollar and other major trading currencies.
The latest increase in policy rate is the first of such moves since November 2018.
GPRTU Announces Possible Transport Fare Increase Next Monday Over GH¢10 Per Litre Fuel Price
Meanwhile the recent fuel price hikes that took petrol price to over GH¢10 per litre has compelled the Ghana Private Road Transport Union (GPRTU) to consider another transport fare increase by Monday, March 21, 2022.
The notice by the GPRTU spokesperson, Abbas Ibrahim Moro, on Thursday, March 17, 2022 comes less than a month after transport fares were increased.
He told 3 News that nobody sets up a business to make losses so the fuel price increase leaves the GPRTU, the largest and most influential driver union in Ghana, with no choice than to also increase fares to make up for increased cost of doing business.
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