As expected, the Monetary Policy Committee (MPC) of the Bank of Ghana has kept its key lending rate to banks at 29%.
This means that the cost of borrowing will not change much in the next two and half months, as it averages 32.7% as of February 2024.
Addressing the media, the Governor of the Bank of Ghana, Dr. Ernest Addison assured that the rate of inflation is under control, and therefore there is no need for further hikes to address it.
“After decelerating sharply in 2023, the pace of disinflation has slowed in the first two months of the year. Although inflation rose slightly in January 2024 and edged down in February, the latest inflation forecast suggests a slightly elevated profile from the possible upward revision in transport fares, adjustment in utility tariffs, higher ex-pump prices, and some pass-through of exchange rate depreciation”.
Overall, risks to inflation are slightly on the upside and will require close monitoring”, Given these considerations, the Committee decided to maintain the Monetary Policy Rate at 29.0%”, the Governor stated.
Money market rates trended downward
Money market rates continued on a downward trend at the short end of the yield curve.
The 91-day and 182-day Treasury bill rates declined to 27.87% and 30.34% in February 2024, from 35.67% and 35.73% respectively, in the same period of 2023.
Similarly, the rate on the 364-day instrument decreased to 30.90% in February 2024 from 34.92% in February 2023.
