The Bank of Ghana’s Monetary Policy Committee (MPC) will hold its 106th Regular Meetings today, Wednesday, May 18, 2022, through Friday, May 20, 2022, to review economic developments.
On Monday, May 23, 2022, the MPC’s regular meetings will conclude with an announcement of a decision to either maintain, reduce, or increase the policy rate.
The policy rate, which informs the rate at which the central bank lends to commercial banks and thus influences final interest rates, was raised by 250 basis points to 17 percent at the most recent meeting to tame inflation, which has risen by about 10 percentage points since January’s 13.9 percent to April’s 23.6 percent.
So should the Central Bank once again increase the policy rate even though it could lead to a hike in interest rates?
CEO of the Databank Group, Kojo Addae-Mensah in an interview with Citi Business News noted that an increase is likely.
“Things have been so fluid in such a short time. The inflation rate has gone up again, with food and transport pushing the national rate up. A few meetings I’ve had in the past few weeks with my clients has seen some of them asking how they can catch up with inflation, especially seeing that inflation is higher than the treasury bill rates and the policy rate. So it’s beginning to feel like the policy rate may need to be looked at again, especially on the back of the recent hike in inflation.”
