Bank of Ghana raises monetary policy rate
Accra, Feb. 15, 2012
Commercial banks in the country are likely to increase their lending rates. This follows a 10 per cent increase of the monetary policy rate by the Bank of Ghana.
This, according to the Central Bank, is to contain future inflation pressure and realign interest rates in favour of domestic assets.
The monetary policy rate has remained at 12.5 percent for some months now. Being the prime lending rate, commercial banks adjust their interest according to the rates charged by the Bank of Ghana.
The increase in the monetary policy rate according to the Bank of Ghana is due to the Euro zone debt crisis, fiscal pressures and the upward volatility in the foreign exchange market.
Governor of the Central Bank, Kwesi Amissah-Arthur said at a press conference in Accra, that the lending rate for commercial banks has been increased to control the likelihood of inflation increasing beyond the single digit.
He said there were concerns about the volatility of the cedi against major currencies as seen in recent weeks due to the rapid pace of imports in 2011 and the unusual surge in demand for foreign exchange during the last quarter of the year, which created a misalignment in Bank of Ghana’s foreign exchange cash flow.
Mr Amissah-Arthur said Bank of Ghana would continue to monitor closely the performance of the cedi against the dollar and the other major currencies and take appropriate measures to stem potential threats to achieving the inflation target.
Global inflation is, however, anticipated to ease as commodity prices stabilize, with developing and emerging countries being the greatest beneficiaries.
Winiefred Ampiaw, e.tv Ghana news
Accra, May 17, 2012
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