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ACCRA, Nov.23 (Xinhua) – Ghana’s central bank announced on Monday a decision to keep its monetary policy rate at 14.5 percent, as headline inflation fell to 10.1 percent in October.
It is the fourth time in a row that the central bank has maintained the rate after reducing it to this level in March.
Ernest Addison, Governor of the Bank of Ghana, told the media after the 97th meeting of the Monetary Policy Committee that overall macroeconomic conditions had improved compared to conditions in September.
“Inflation is almost on target for the upper band. Fiscal and monetary policy measures, which have increased liquidity in the economy, seem not to be impacting the rate of price increase, partly due to the existence of the gap production, “Addison said.
He added that growth prospects were also improving with a stabilized crude oil price, a stable current account balance, a solid inflow of remittances and a predictable exchange rate, as “reserve buffers remain strong.”
“The key risks, however, are the evolution of the budget deficit and financing needs to support budget implementation and the uncertainty surrounding the COVID-19 pandemic,” Addison added.
Ghana, a developing country that depends on the export of crude oil, gold and cocoa, uses the monetary policy model of inflation targeting to adjust liquidity and contain inflationary pressures.
