The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has increased its Monetary Policy Rate by 250 basis points to 24.5%.

Addressing the media, the Governor of the central bank, Dr. Ernest Addison, explained that the decision has been made check the rising rate of inflation as the country negotiate with the International Monetary Fund for an economic programme.

He explained that inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations.

He therefore added that the committee therefore remains committed to re-anchoring inflation expectations and returning to a disinflation path.

The upward adjustment means it will become more expensive to borrow from banks, a situation that will push cost of living and doing business in the country further up.

BoG increases policy rate by 10% since March 2021

Since the Bank of Ghana first increase the policy rate in March 2021, the interest policy rate has gone up by 10%.

The Central Bank increased the policy rate by 2.5% on March 25, 2022 to 17%, and subsequently increased it on May 23, 2022 to 19%.

It again adjusted it upwards by 300 basis points to 22% in August 2022.