By Central Bank News
The Bank of Ghana (BOG) left its policy rate unchanged at 15 percent, as expected, saying the risks to inflation and growth were evenly balanced.
The central bank of Ghana, which has raised interest rates by 250 basis points this year to contain inflation, said those rate increases and other measures to tighten liquidity had yielded positive effects and some stability had been achieved on the exchange rate front.
“The challenge is to sustain the stability that has been achieved so far,” the BOG said in a statement following a meeting of its Monetary Policy Committee.
Headline inflation in Ghana was steady at 9.5 percent in August, as in July, within the central bank’s target of inflation below 10 percent.
The bank forecasts that inflation will remain within the target band during the year and said pass-through effects of exchange rate depreciation appear muted and the are positive indications that the impending harvest will have a moderating effect on inflation in the next months.
However, it cautioned that fiscal policy could pose a risk to the inflation outlook, with liquidity injections, arrears, fuel and utility subsidies posing the main risks.
“The Committee will remain vigilant and respond to any emerging risks appropriately,” the bank said, adding that the pace of economic activity had been sustained, “albeit at a much slower pace than last year.”
“Economic assessments at this MPC round point to a moderating growth outlook, in line with trend. However, uncertainties in the global economy can affect domestic growth prospects,” it said.
Ghana’s Gross Domestic Product rose 8.7 percent in the first quarter from the same quarter last year.
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