How long will Bank of Ghana continue to hold rates at 27%?

The Bank of Ghana's Monetary Policy Committee recently decided to keep its monetary policy rate steady at 27 per cent. This decision comes amidst ongoing efforts to address inflationary pressures and align monetary and fiscal policies in the country. Benjamin Boachie, Chief Economist at Secondstax, provided valuable insights into the central bank's move and the broader economic landscape in Ghana. Boachie emphasized the importance of maintaining a tight monetary policy stance to bring down inflation, which remains above target levels. He acknowledged the positive impact of previous rate cuts but also highlighted a perceived policy mistake when adjustments were made prematurely. Boachie expressed confidence in the current strategy, urging authorities to anchor interest and inflation rate expectations for sustainable progress. As Ghana welcomes a new administration, expectations are high regarding their economic policy agenda. Boachie commended signals indicating a focus on revenue generation and debt management, which are crucial for long-term fiscal stability. The collaboration with international bodies like the IMF is expected to bolster economic stability and investor confidence. The performance of the Ghanaian Cedi has also been a point of interest, with recent improvements bolstered by rising commodity prices and enhanced foreign reserves. Boachie expressed optimism for the Cedi's stability in the coming months, reflecting the central bank's proactive efforts in safeguarding its value. Investor sentiment towards Ghana appears positive, with Boachie citing a favorable outlook based on recent developments and signals of responsible economic management. Overall, the alignment of monetary and fiscal policies, coupled with prudent debt management and revenue mobilization, sets a promising trajectory for Ghana's economic growth and stability.