<\/p>\n
Dr. Ernest Addison<\/strong><\/p>\n \u00a0<\/p>\n THE CENTRAL Bank yesterday announced a 250-percentage points increase to the policy rate to push it up to 24.5%, to help tame soaring prices in the economy.<\/p>\n Speaking at a press briefing after the 108th Monetary Policy Committee (MPC) meetings which took place this week, Governor of the Bank of Ghana (BoG), Dr. Ernest Addison,\u00a0said the bank has been raising borrowing costs since January to try to tame price inflation, which saw it increasing the rate by 300 basis points from 19 percent to 22 percent on August 17, 2022.<\/p>\n Inflation remains elevated and the balance of risks is on the upside, although the\u00a0forecasts are for monthly inflation to continue to slow down, the risks are on the\u00a0upside, emanating largely from pass-through effects of the currency depreciation, the\u00a0recent upward adjustment in utility tariffs, and rising inflation expectations, Dr.\u00a0Addison indicated.<\/p>\n He assured that the\u00a0MPC also remains committed to re-anchoring inflation expectations and returning to\u00a0a disinflation path.<\/p>\n According to him, the outlook for the Ghana Cedi has improved, aided by the recent disbursement of the loan from Afreximbank of $750 million, the signing of the syndicated cocoa loan of $1.13 million, and the agreement with gold and oil companies to purchase the repatriated foreign exchange earnings of about $83.9 million so far, will help stabilise the exchange rate.<\/p>\n \u00a0<\/p>\n Inflation<\/strong><\/p>\n Dr. Addison said \u201cprice pressures have remained elevated. The latest reading indicated that headline\u00a0inflation accelerated to 33.9 percent in August 2022, from 31.7 percent in July and 29.8 percent in June.\u201d<\/p>\n \u201cThe rise in the August inflation was broad-based, driven by both\u00a0food and non-food prices. Food inflation rose to 34.4 percent from 32.3 percent in<\/p>\n July, whereas non-food inflation jumped to 33.6 percent from 31.3 percent, over the\u00a0same comparative period. The upturn in food and non-food inflation was influenced\u00a0by prices of both local and imported components in the consumer price basket,\u201d he added.<\/p>\n The BoG Governor said in line with these trends, underlying inflation pressures remained heightened, pointing out that the\u00a0bank\u2019s core inflation measure, which excludes energy and utility, increased further to\u00a032.6 percent in August, from 30.2 percent in July 2022.<\/p>\n \u201cSimilarly, all the other core measures of inflation rose, reflecting the generalised increase in price levels,\u201d he posited.<\/p>\n He disclosed that the bank\u2019s latest surveys showed increased inflation expectations across consumers,\u00a0businesses, and the financial sectors.<\/p>\n \u201cNotwithstanding the above trends, monthly inflation has declined for four consecutive months, reflecting a slowdown in the rate\u00a0of increase in inflation.<\/p>\n \u00a0<\/p>\n Interest Rate<\/strong><\/p>\n Dr. Addison said short term interest rates on the money market had reflected recent developments,\u00a0while medium-term to long-term rates had remained relatively behind the yield curve.<\/p>\n \u201cFor example, while the discount rate on the 91-day instrument has increased to 29.7\u00a0percent in September 2022 from 12.5 percent in September 2021, the coupon rates\u00a0on the 7-year, 10-year, 15-year, and 20-year have remained unchanged at 18.1 percent,\u00a019.8 percent, 20.0 percent, and 20.2 percent respectively,\u201d he revealed.<\/p>\n According to him, the interbank market weighted average rate has increased to 22.05 percent in\u00a0September 2022 from 12.61 percent in September 2021, consistent with the rise in\u00a0the policy rate.<\/p>\n \u201cAverage lending rates of banks have also adjusted upwards to 29.81 percent in September 2022 from 20.20 percent recorded in the corresponding period<\/p>\n of 2021.<\/p>\n \u201cBudget implementation, using banking sector data, for the first 9-months of the year recorded an elevated overall cash deficit of 6.4 percent of GDP, against the revised\u00a0programmed target of 5.0 percent of GDP,\u201d he stated.<\/p>\n Dr. Addison said total receipts of GH\u00a251.49 billion (8.7\u00a0percent of GDP) over the review period, fell short of the projected target of GH\u00a260.08 billion (10.2 percent of GDP), and represented 85.7 percent of the budgeted estimate.<\/p>\n Total payments of GH\u00a289.04 billion (15.0 percent of GDP) was almost on target, representing 99.5 percent of GH\u00a289.46 billion (15.1 percent of GDP). The deficit of\u00a0GH\u00a237.56 billion, together with net foreign loan repayments of GH\u00a23.54 billion, created a resource gap of GH\u00a241.1 billion, which was financed from domestic\u00a0sources and use of resources from the stabilisation fund, he added.<\/p>\n \u00a0<\/p>\n \u00a0By Ernest Kofi Adu<\/strong><\/p>\n \n\t<\/div>\n","protected":false},"excerpt":{"rendered":" Dr. Ernest Addison \u00a0 THE CENTRAL Bank yesterday announced a 250-percentage points increase to the policy rate to push it up to 24.5%, to help tame soaring prices in the economy. Speaking at a press briefing after the 108th Monetary Policy Committee (MPC) meetings which took place this week, Governor of the Bank of Ghana […]<\/p>\n","protected":false},"author":1,"featured_media":1218065,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[72],"tags":[1084,6018,587,179],"class_list":{"0":"post-1218063","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bog","9":"tag-hikes","10":"tag-policy","11":"tag-rate"},"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1218063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1218063"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1218063\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1218063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1218063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1218063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}