The Monetary Policy Committee of the Bank of Ghana (BoG) has reduced the policy rate by 100 basis points from 17 per cent to 16 per cent.
The decision, according to the committee, was influenced by the positive trends on the international market as well as the domestic front.
For instance, core inflation has declined considerably over the months. It falls in line with the government’s target of 8 plus or minus 2 band.
The Governor of the central bank, Dr Ernest Addison, who announced the latest prime rate on Monday, 28 January 2018, said the rate of inflation was 15.4 per cent as of the end of 2016, 11.8 per cent in 2017 and 9.4 per cent in 2018.
This informed the decision to cut the policy rate.
“The Committee noted that the immediate rate of inflation band is well contained and the current conditions provide hope to translate into some of the gains in the macroeconomic stability in the economy. Under the circumstances, the committee decided to reduce the policy rate by 100 basis points to 16 per cent,” Dr Addison noted.