Central Bank prime rate hiked by 100 basis points

The Central Bank has once again increased its monetary policy rate by 100 basis points (1%).

On the back of the increment, the Bank of Ghana’s monetary policy rate rises to 28% from the previous rate of 27%

Cumulatively, the policy rate hikes by the Central Bank since November 2021, comes to some 1,350 basis points (13.5%).

The hike in policy rate by the BoG is on the back of the increment in the country’s headline inflation rate which hit a record high of 54.1% in December.

Given the hike in policy rate, interest rates on loans to the private sector is expected to increase, further making costs of production by businesses in the country more expensive

Announcing the new policy rate, the Governor of the Central Bank, Dr Ernest Addison, noted the Bank’s decision to increase the policy rate is due to the fact that, in the interim, the Central Bank sees moderation in liquidity on the back of implementation of some regulatory measures aimed at underpinning macroeconomic factors to drive down inflation.

Source: norvanreports.com