Ghana MPC retains MPR at 29.5%

Ghana's Monetary Policy Committee (MPC) has decided to retain its policy rate at 29.5% as part of its efforts to address inflationary pressures. Kofi Koduah-Sarpong, the Founder and Chief Executive Officer of Sarpong Capital, shared insights on this decision in an exclusive interview with CNBC Africa. Kodwa highlighted the key takeaways from the MPC's decision, emphasizing that the Bank of Ghana recognized positive developments in the economy. Despite raising the policy rate by 250 basis points earlier in the year, the MPC chose to maintain the current rate, signaling a measured approach to monetary policy. The alignment between the MPC's stance and recommendations from the International Monetary Fund (IMF) was noted, indicating a coordinated effort to stabilize the economy. The discussion also touched on the importance of a harmonious relationship between monetary and fiscal policies to achieve sustainable economic growth. Looking ahead, Kodwa expressed a cautious optimism regarding future rate hikes, citing a need for a balanced approach to address inflation without overly tightening monetary conditions. The conversation delved into recent economic data, including a trade surplus of $1.6 billion in the first four months of the year, tempered by a negative balance of payments situation. Despite the challenges, the IMF program was seen as a positive step towards economic resilience, with expectations that it would bolster investor confidence in the Ghanaian economy. Kodwa reassured investors, emphasizing Ghana's commitment to fiscal discipline and the potential for a strengthened currency. As the country gears up for presidential elections next year, concerns were raised about increased spending and adherence to the IMF program. Kodwa expressed confidence in Ghana's ability to maintain fiscal discipline during the electoral period, drawing on past experiences of responsible governance. The interview with Kofi Koduah-Sarpong provided valuable insights into Ghana's monetary policy outlook and the broader economic landscape. The country's commitment to addressing inflation while navigating external economic challenges was underscored, with a message of cautious optimism for the future.