BoG Monetary Policy Committee Meets Amid Falling Inflation

The BoG Monetary Policy Committee began its 126th meeting today. This meeting will focus on major economic developments. One key topic is the steady fall in inflation. Another is the recent slip of the cedi. The committee will review current conditions. It will then set the policy tone for the central bank.

At its last meeting in July, the committee cut the policy rate. It reduced the rate by 300 basis points. The new rate became 25%. This followed five straight months of easing inflation. Now, inflation has fallen even further. It hit 11.5% in August. This is below the year-end target of 11.9%. Due to this, the market widely expects another rate cut. Favorable base effects support this expectation.

However, the committee faces certain risks. These risks could change its policy stance. Global trade tensions remain a threat. A potential hike in utility tariffs is another risk. These factors could increase inflation. Consequently, the committee may be cautious with the rate.

Regarding the local currency, Governor Dr. Johnson Asiama has downplayed its recent slide. He attributes the blips to seasonal trade pressures. He believes it is not a reversal of earlier stability gains. This is a tough time for the committee. Their deliberations will conclude soon. On Wednesday, they will hold a press conference. There, they will announce the policy rate decision. They will also share the central bank’s economic outlook.

Source: Citinewsroom