Policy rate kept at 13.5%

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The Governor of the Bank of Ghana Dr Ernest Adison has said  after the Monetary Policy Committee assessed that the risks to inflation and growth were broadly balanced it has decided to keep the policy rate at 13.5 percent.

He explained that headline inflation has eased sharply and reverted within the medium-term target band, driven mainly by the tight monetary policy stance and some base drift effects.

The latest forecast remains broadly unchanged with inflation projected to remain within band and around the central path in the forecast horizon barring any upside
risks from fiscal pressures.

although the process of global growth recovery is ongoing, driven by continued policy support and rising consumer confidence, the outlook remains uncertain. This is due to uneven vaccination across regions, rising Covid-19 infection rates fuelled by new variants of the virus, cases of vaccine hesitancy and divergence in the recovery across jurisdictions. Headline inflation has risen sharply in many economies due to the sharp increase in energy prices with concerns of overheating.

In emerging market and developing economies, a re-alignment of currencies in response to the global strengthening of the US dollar, resulted in many of these currencies coming under pressure with implications for inflation in the near term.

In the view of the Committee, the opening-up of economies, rising inflation abroad, stronger growth outcomes in advanced economies with possible interest rate responses from central banks, are beginning to shape investor behaviour, with potential impact on the domestic bond market.

By laudbusiness.com|Ghana

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