Business News of Wednesday, 18 February 2015
Some economists are predicting that the Monetary Policy Committee of the Bank of Ghana is likely to maintain the policy rate at the current 21 percent.
The bank’s Monetary Policy Committee yesterday began its meetings to review the economy. The meeting will end today with the announcement of an appropriate positioning of the bank’s policy rate.
The Bank of Ghana in November last year increased the rate by 200 basis point to 21 percent from 19 percent and attributed the hike to move to help tame inflation which at the time stood at 16.9 percent, the highest since March, 2010.
The policy rate is used by commercial banks to calculate their base rates. Economist Dr John Gatsi tells Citi Business News maintaining the policy rate this time round will be prudent as prices of crude oil on the world market have dropped significantly.
‘’Maintenance is the prospective view; some of the major contributors to change in policy rate have been stable with the influence of crude oil and downstream prices has gone down hence their contribution to build up to inflation has been slow and at the same time the year has begun with a marginal reduction in inflation.’’
He added that there has been some control on other risks within the economy, hence maintaining the 21pecent is the way to go.
Speaking further, Dr Gatsi said, despite the marginal rise of prices of crude oil from 46 dollars to 52 dollars on the world market this would not have any resultant effect on the economy as ‘’the budget for crude oil for the year has been pegged at USD 99.37 per barrel; and if we are now seeing the price oscillating around the current rate now, we are still getting a price that is far above what the estimates in the 2015 projects” he said.