BoG drops its base rate to 29%

The Bank of Ghana (BoG) has reduced its Monetary Policy Rate (base rate) to 29 percent.

The reduction indicates a 100 basis points decline in the apex bank’s prime rate from the previous policy rate of 30 percent.

The reduction in the policy rate was announced by the Governor of the Bank of Ghana, Dr Ernest Addison at the 116th Monetary Policy Committee (MPC) press briefing on Monday, January 29, 2024.

The new policy rate follows the review of macroeconomic developments in the country for the past two months by the MPC.

With a reduction in the policy rate, the lending rate by commercial banks to businesses is expected to fall in line with the new policy rate.

According to Dr Addison, the decision by the Committee to cut the policy rate comes on the back of the steady decline in headline inflation from the December 2022 year high of 54 percent to 23 percent in December 2023.

Asserting that inflation expectations are well anchored with the outlook for inflation being continued disinflation as previous policy tightening effects impact both headline and core inflation.

Source:norvanreports