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The Bank of Ghana (BoG) has announced that it is maintaining its monetary policy rate at 27% in light of persistent inflation risks and the need to support the country’s ongoing economic recovery.
The decision comes after Ghana’s inflation rate climbed to 23.8% in December 2024, exceeding the government’s initial inflation target of 15% for the year.
In a press briefing held at the bank’s new headquarters, Bank Square, Governor Dr. Ernest Addison explained that the central bank is adopting a cautious approach, given the underlying inflationary pressures and global economic uncertainties.
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He highlighted that food prices, in particular, have been a significant contributor to the inflationary trend, with disruptions in local agricultural production caused by adverse climate factors, such as dry spells and irregular rainfall.
“While the inflation outturn for 2024 deviated from the target, it is expected that the disinflation process will resume contingent on renewed efforts at fiscal consolidation, which is anticipated in the new administration’s economic policy agenda and the yet-to-be-presented 2025 budget statement,” Dr. Addison noted.
He further elaborated that the BoG’s focus remains on achieving a gradual decline in inflation, with an eventual return to the medium-term target of 8% ± 2%.
However, he acknowledged that the timeline for this target would be extended due to the current economic challenges.
Dr. Addison emphasised that the BoG will continue to closely monitor economic developments and adjust its monetary policy as needed to guide inflation back on track. The decision to hold the policy rate steady reflects the central bank’s strategy to balance inflation control with the need to foster economic growth.
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