The Monetary Policy Committee (MPC) of the Bank of Ghana has announced a decision to strengthen its monetary policy stance against foreseeable inflationary pressures.
Announcing the decision, Governor Henry Kofi Wampah said inflation pressures had persisted since the beginning of the year due to uncertainties in the foreign exchange market.
Sequel to the above, the bank raised by 100 basis points its benchmark policy rate to 25 percent from the previous 24 percent, making it the highest since March 2003 when the policy rate hit 27.5 percent.
This, according to him, has implications for petroleum pricing and other tradable goods and services.
Inflation and inflation expectations remain elevated and outside the medium-term target band of 8±2 percent (plus or minus 8 percent), the governor stated.
Inflation, which read 16.9 in May, rose as high as 17.9 in July before returning to 17.3 in August, according to the Ghana Statistical Service.
In spite of the decline in inflation last month, Wampah pointed out that core inflation, which is the Consumer Price Index (CPI), excluding energy and utilities, however, continued to rise, suggesting persistent underlying inflation pressures.
The Bank of Ghana had forecast the attainment of the medium-term inflation target of 8.2 percent by the middle of next year; however the governor said this would require a further tightening in monetary policy stance else the target horizon would shift into 2017.
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