The Bank of Ghana (BoG) has announced a reduction in its policy rate from 29% to 27%, marking the second decrease this year.
The decision follows a comprehensive review of the current economic landscape, particularly in light of the decline in inflation to 20.4% for August 2024.
This reduction reflects the central bank’s commitment to creating a more conducive environment for investment and consumer spending, which are essential for revitalizing the economy.
Governor of BoG, Dr. Ernest Addison, emphasized that the cut is a result of various stabilizing factors, including a relatively stable cedi and lower inflation risks.
He noted that the implementation of robust fiscal policies has contributed to improved macroeconomic conditions.
“Macroeconomic conditions have generally improved while disinflation process is on course,” he stated, highlighting the central bank’s proactive approach to managing the nation’s economic challenges.
Looking ahead, forecasts suggest that inflation is on a downward trajectory, with expectations to align within the target range of 13-17% for the year and gradually approach the medium-term goal of 6-10% by the end of 2025, assuming no unforeseen shocks occur.
“At the current juncture, the committee judged the risks to inflation outlook as fairly balanced,” Addison remarked, reinforcing the committee’s cautious optimism as they navigate the complexities of the economic environment.
