By CentralBankNews.info
The monetary policy rate used by Ghana’s central bank has been raised to 24.0 percent from 22.0 percent as part of the Bank of Ghana’s move to merge the policy rate with the reserve repo rate in an effort to increase transparency.
The Bank of Ghana, which raised the monetary policy rate by 100 basis points in May to 22.0 percent, said the merged rate will continue to be referred to as the Monetary Policy Rate and the change does not reflect a change in monetary policy stance as the maximum lending rate remains unchanged at 25.0 percent.
The reverse repo rate is the effective rate at which the Bank of Ghana lends to commercial banks.
The central bank has also launched a 7-day reverse repo lending facility as the principal instrument through which it will inject liquidity into the banking system during periods of liquidity shortage.
The Bank of Ghana issued the following statement, dated Aug. 10:
The merged rate shall continue to be referred to as the Monetary Policy Rate and will be positioned at 24 per cent. This merger is to ensure transparency in the monetary policy stance of the Bank of Ghana.
These changes, in effect, do not reflect a change in monetary policy stance, since the maximum lending rate of the Bank of Ghana remains unchanged at 25 per cent.
The Bank has also introduced a 7-day Reverse Repo (lending) Facility, available to all banks to help them manage liquidity more effectively. The Reverse Repo Facility is the principal instrument through which Bank of Ghana will inject liquidity into the banking system during periods of general liquidity shortage. The detailed modalities and procedures for accessing the facility have already been communicated to the banks. “
