By: Franklin ASARE-DONKOH
The Monetary Policy Committee of the Bank of Ghana (BoG) has increased the Monetary Policy Rate by 250 basis points to 24.5 percent.
The Governor of BoG, Dr. Ernest Addison in announcing the new rate explained that the increase has been necessitated by the problems associated with Ghana’s rising inflation, which stands at 33.9 percent.
The Governor of BoG said, “Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations,” the central bank governor.”
According to him, his outfit also noted a decline in Gross International Reserves to $6.6 billion, which represents about three months of import cover for goods and services.
“This compares with the December 2021 position of $9.7 billion, which was equivalent to over four months of import cover.
“Net International Reserves, which excludes encumbered assets and petroleum funds, is estimated at US$2.7 billion as of September 2022,” Dr. Addison noted.
While Ghana has been noted as having one of the worst-performing currencies in 2022, the BoG says the outlook for the Ghana Cedi has improved.
This improvement has been aided by the recent disbursement of the loan from Afreximbank of US$750 million and the signing of the syndicated Cocoa Loan of $1.13 million.
According to the Central Bank, there has been an agreement with Gold and Oil companies to purchase the repatriated foreign exchange earnings of about $83.9 million so far.
