The Bank of Ghana has increased its policy rate by 150 basis points to 29.5% to help check the high inflation and any downside risks to the economy.

This means the cost of credit will continue to remain high, affecting household spending and private sector growth.

Average lending rates shot up marginally to 36.64% in February 2023, from 35.58% recorded in December 2022. This is equivalent to 3.02% interest rate on loans per month.

Announcing the development few minutes ago, Governor of the Bank of Ghana, Dr. Ernest Addison, said the ease in price pressures abroad will likely impact positively on Ghana’s domestic inflation profile going forward.

He said the recent Domestic Debt Exchange Programme (DDEP) has impacted negatively on banks, hence the need for the Central Bank to make necessary adjustments to its regulatory requirements to support the banks.

“Whiles the domestic economy still faces relatively tight global financing conditions and heightened uncertainty about the global economic outlook, the effects of these could be amplified inherent vulnerabilities including structural and excess liquidity following the DDEP and the widening negative outlook gap”.

He, however, said the banks remain strong, sound and stable based on its recent stress test.

He added that the Monetary Policy Committee of the Bank of Ghana will continue to monitor developments within the banking industry to reduce the downside risks to the economy.

More soon…………..