Skip to main content

BoG maintains policy rate at 21%




By: Fred Yaw Sarpong

The Bank of Ghana (BoG) has maintained the monetary Policy Rate at 21% taking into consideration the risks to the inflation and how it performance going to be in future.

The Monetary Policy Committee (MPC) of the BoG led by the Governor Dr. Henry Wampah announced this in Accra after the committee had reviewed the states of the economy.

According to the committee, the upside risks to the inflation forecasts include the effects of the prolonged energy crisis through increased input costs, higher inflation expectations as well as emerging pressures in the foreign exchange market.

‘On the downside however, the pass-through effects of the falling crude oil price, declining inflation expectations, the on-going fiscal consolidation, and a possible program with the IMF are expected to exert some downward pressure on inflation and drive inflation further down towards the target bands,’ said the MPC committee.

In assessing risks to the outlook, the committee observed the continued vulnerability in the global environment and volatilities in the financial markets which have resulted in declining commodity prices. In particular, the declining trends in crude oil prices continue to worsen the risks facing most oil exporting economies.

It stated that although the declining trend in oil prices could have a favourable effect on the balance of payments, the loss in oil related revenues would impact negatively on the national budget.

The committee however said there was a pickup in the Composite Index of Economic Activity (CIEA) during the last quarter of 2014, boosted by a number of factors including DMBs credit to the private sector, SSNIT contributions and port activity.

It added that this was supported by improved sentiments and optimism by businesses and consumers as well as easing credit conditions to both enterprises and households.

‘However, the risks to the growth outlook remained tilted to the downside due to the challenges in the energy sector, expected fiscal consolidation, a tight monetary policy stance, and the adverse effects of lower international commodity prices (particularly crude oil prices),’ said MPC committee.

It indicated that these are expected to be offset by a pick-up in consumer and business sentiments, strong growth in real credit to the private sector, addition of the Atuabo Gas processing plant, and the IMF deal which will underpin investor confidence.

In assessing the inflation outlook, the committee noted that inflation, which peaked in the last quarter of 2014, has begun to decline in January, 2015 on the back of tight monetary policy stance, base effects and improved inflation expectations.

The committee expressed concern about the rise in food inflation ahead of the lean season as well as the rising core inflation. However, the latest forecasts show that the disinflation is likely to continue through 2015, heading towards the target band of 8.0 ±2 percent later in 2016.




Comments

Popular posts from this blog

Akuapem-Apirede to promote tourism

By: Fred Yaw Sarpong sarpong007@gmaail.com
The Chiefs and people of Akuapem-Apirede in the Okere Constituency of the Akuapem North Municipality have put in place strategic plans to promote tourist sites in the town.
Apiredehene, Nana Saforo Okoampah III told the Daily Express that their vision is to develop Apirede in a modern way.
“We want to have a modern society and environment. We are doing this on the basis of promoting tourism here,” he added.
According to the Apiredehene, it’s their plan to promote the historic sites and the geographical location of the community.
Apirede is one of the 17 towns that forms the Akuapem State and historically, it used to house the armours of the Akuapem State. The community is part of the Nifa division of Akuapem.
He stated that one of those things was called ‘Odosu’ (the war god for Okuapemhene). “The Chief Executioner in those days for Akuapem also came from Apirede and items that he used were also kept here,” he stated.
“These are a lot of things …

PIAC told to go to court to enforce recommendations

By: Fred Yaw Sarpong
sarpong007@gmail.com

The Public Interest and Accountability Committee (PIAC), the mandated body to monitor the use of Ghana’s oil revenues has been asked to go to court to seek strict compliance of the laws covering accountability of oil funds in the country.

According to Dr. Steve Manteaw, the Campaign Coordinator for ISODEC and a member of the PIAC , it’s time for PIAC as a body to consider going to court to compel institutions responsible for managing Ghana’s oil revenue to answers some questions concerning the expenditure of oil funds.

He pointed out that there are several recommendations made by the PIAC in its past reports on management of petroleum revenues, and a lot of these recommendations has received no positive response from the institutions concerned.

He disclosed this to the Daily Express at a three-day workshop on Interrogating the 2016 Semi Annual PIAC Report at Koforidua in the Eastern Region.

The workshop was organized by the Institute of Financ…

BoG shuts down two financial institutions

The Bank of Ghana has closed down two financial institutions in the country. This was after the central bank investigation revealed that the two companies were operating without approval.

The two companies were Agro Development Fund Services Limited (ADFSL) and Hebron Financial Investment Limited (HFIL).

The Daily Express gathered that the ADFSL was asked to stop operating after the central bank realized the institution had not been licensed to take deposit from the public.

A statement from BoG said the ADFSL continued to operate despite the orders from the Bank of Ghana. It however closed down ADFSL’s operation until further notice.

The Bank of Ghana said that the ADFSL is located at Asufufu, opposite the Sunyani Traditional Council in the Brong Ahafo region.

“The decision to close down ADFSL is in furtherance of section 20(2) (g) of the Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930). Bank of Ghana has investigated ADFSL thoroughly and has concluded that its a…