The Bank of Ghana's Monetary Policy Committee increased the monetary policy rate by 250 basis points, from 22 to 24.5 percent.

According to the central bank, the action is anticipated to reduce inflation, which has been on the rise recently as a result of the depreciation of the cedi, increases in tariffs, and Ghana's anticipation of accessing an IMF-supported program.

While spending have generally been on track, revenue performance has fallen short of projections, making it more difficult to implement fiscal policy.

"Financing the budget so far has been predominately done by the banking sector with the central bank absorbing a larger share. Persistent uncovered auctions and portfolio reversals by non-resident investors continue to pose risks to the financing of the budget resulting in the monetization of the budget deficit by the central bank," he explained.

"The MPC recognises the fact that the current condition is optimal and will be interim until agreements are reached on an IMF-supported programme. The Committee assesses that the engagement with the IMF has been positive and early conclusion of programmes discussions will help re-anchor stability"

Dr. Addison, however, added that the outlook for the Ghana Cedi has improved aided by the recent disbursement of a $750 million loan facility from Afreximbank.

He also attributed the signing of the $1.13 billion COCOBOD syndicated loan and the agreement with gold and oil firms to purchase repatriated foreign exchange earnings estimated at US$83.9 million thus far will help stabilise the exchange rate.

"Inflation remains elevated and the balance of risk remains on the upside. Although the forecast are for monthly inflation to continue to slow down, the risks are on the upside emanating largely from the pass-through effects from the cedi depreciation, upward adjustment in utility tariffs and rising inflation expectations."

"The Committee remains committed to re-anchoring inflation expectations and returning to a disinflation path. Under the circumstances, the MPC decided to increase the policy rate by 250 basis points to 24.5 percent."

BoG Governor and Chairman of Committee, Dr. Ernest Addison made the announcement at a press conference held on October 6, 2022.