The Monetary Policy Committee (MPC) of the Bank of Ghana will conclude its regular meeting today, July 26. The meeting, which began on July 23, is focused on assessing economic developments and determining necessary policy measures. The MPC is also set to announce the new policy rate on Monday, July 29.
This meeting comes at a time when Ghana’s economy is showing signs of recovery under the International Monetary Fund (IMF) programme.
Currently, the policy rate remains relatively high at 29%, with the Ghana Reference Rate, which serves as the base rate for bank lending, slightly higher at 29.4% as of the end of June. Average lending rates were at 31.1%, and the interbank rate stood at 28.8% during the same period, according to the latest data from the Central Bank.
Inflation has decreased to 22.8% in June, with food inflation outpacing non-food inflation. However, the cedi continues to depreciate against major currencies such as the US dollar, British pound, and euro.
The Consumer Index of Economic Activity has improved, though other indicators such as retail sales, domestic VAT collection, cement sales, port activity, and passenger arrivals have shown mixed trends.
Externally, cocoa prices have seen significant year-to-date growth, while Brent crude oil and gold prices have also increased. The trade balance remains positive, and gross international reserves stand at US$6.87 billion, representing 3.1 months of import cover.
In the banking sector, total assets and deposits have grown annually, though total advances have grown at a slower pace. The capital adequacy ratio is at 14.3%, and the non-performing loan ratio is 24.1%.
These factors are guiding the MPC in determining the policy rate. However, many market watchers project that the Committee is likely to maintain the current rate, given the IMF’s recommendation that the Central Bank should continue to maintain a tightened monetary stance.
