By: Esther Osei Adomah
The Bank of Ghana lifted its benchmark monetary policy rate by 250 basis points to 27% during its November 2022 meeting, exceeding market expectations of 26% and bringing borrowing costs to the highest since 2003.
This is the fifth consecutive increase this year to combat high inflation and support the cedi, which fell 54% against the dollar in the year to November. The annual inflation rate rose to a new 21-year high of 40.4% in October, up from 37.2% the previous month.
With interest rate’s decisions made by the Monetary Policy Committee of the Ban of Ghana, the official interest rate is the monetary Policy Rate
According to policymakers, headline inflation will likely peak in the first quarter of 2023 and settle at around 25% by the end of 2023, based on the inflation forecast.
Meanwhile, the Bank’s high-frequency indicators indicated that economic activity moderated in the third quarter compared to the first two quarters of the year.
