The monetary policy committee of the Bank of Ghana has increased the policy rate by 300 basis points to 22 percent from 19 percent. This development follows an emergency Monetary Policy Committee meeting earlier on Wednesday because of Ghana’s recent economic challenges. The Bank of Ghana in a statement said it considered risks to the inflation outlook before increasing the policy rate.
In addition, the central bank raised the primary reserve requirement of banks from 12 percent to 15. The committee in the statement said the decision is to help curb inflation, which has gone up to almost 32 percent, and the cedi which has depreciated by 34 percent.
In addition to increasing the policy rate, the Central bank also introduced additional measures to boost the supply of foreign exchange to the economy. But the measures according to Dean of the University of Cape Coast Business School, Prof John Gatsi would not yield the necessary results as expected.