The Bank of Ghana (BoG) will be holding its 119th Monetary Policy Committee (MPC) meeting starting Tuesday, July 23. The meetings are expected to end on Friday, July 26.
During the meeting, the BoG will be reviewing developments in the economy including inflation and policy rates.
It will conclude with a press conference on Monday, July 29 to announce key decisions taken by the MPC.
At the last meeting, the Committee kept the policy rate at 29 percent.
Addressing the 118th MPC press conference in Accra on Monday May 27, the Governor of the Bank of Ghana said that the effort to reduce global inflation had stalled due to increased crude oil prices. Central banks had been mostly cautious about losing the monetary policy stance.
He explained the Bank of Ghana remained fully committed to providing stability in the exchange rate for the cedi.
The Bank of Ghana was taking measures to improve market conduct and instill sanity in the market for foreign exchange. To this end, the Bank has worked with the Ghana Association of Banks to streamline documentation requirements for foreign payments to minimise the incentives to resort to the informal markets.
To deal with the high demand pressures on the foreign exchange market, the Bank had taken steps in the past few weeks to directly absorb foreign exchange needs of some corporate institutions, and this had led to a reduced pipeline demand for foreign exchange from the commercial banks.
The Bank, he added, was fully aware of the operations of illegal operators in the foreign exchange market and is working with the Financial Intelligence Centre to sanitise the foreign exchange market. Foreign exchange bureaux monitoring will be stepped up to ensure compliance with their regulatory framework.
“In line with this, all foreign exchange bureaus advertising rates outside their premises and on social media platforms must immediately desist from the practice. The Bank has set up a task force to monitor all the foreign exchange bureaux to ensure compliance. The foreign exchange market is also affected by sentiments and pronouncements made in this election year and we urge all to manage pronouncements which weakens confidence in the local economy,” Dr Addison said.
On fiscal policy, expenditures outpaced revenue growth in the first quarter, reflecting the
frontloading of IPP arrears payments.
The strong reserve build-up of about US$2 billion since the beginning of the IMF programme, the strong disinflation process, significant progress on fiscal policy consolidation, positive current account balances, and the good progress on the external debt restructuring process, have all worked together in concert to deliver enough buffers to support the exchange rate.
The latest forecast showed a slightly elevated inflation profile on account of recent exchange rate pressures and adjustments in transportation fares. However, the projections show that inflation will remain within the monetary policy consultation clause of 13-17 percent at the end of the year. These forecasts are contingent on sustaining the tight monetary policy stance, including aggressive liquidity management operations.
