Following the Bank of Ghana’s quest to bring down the inflation rate, cost of borrowing is expected to go up further as the Monetary Policy Committee begins its 106th meeting.

Even before the meeting, some analysts and research outfits have projected a further rise in the Central Bank’s policy rate to help reduce money supply, and push inflation down.

The Central Bank in its last meeting in March 2022 adjusted the policy rate by 250 basis points to 17% to help check the rising inflation rate, which has since hit 23.6% in April 2022.

This will compel the MPC to dig deep and find solutions to the increasing inflation rate which has threatened the economic fundamentals.

Since the recent hike in inflation is largely due to supply side, the Committee will again have to adopt certain measures beside the Inflation Targeting framework to bring down inflation or stabiles the rising prices of goods and services.

The Institute of Economic Affairs (IEA) had already projected a 200 basis points increase in the policy rate to 19%.

Its argument is that the move will help narrow the gap with the rising inflation and also ease to some extent the risk of foreign currency outflows.

The IEA pointed out that “going by the principle underlying the Inflation Targeting (IT) with current inflation and future outlook being so elevated, the immediate response by the BoG should be to tighten monetary policy by raising the PR.”

Also, some of the key issues that are expected to dominate the three-day meeting include extra monetary measures to complement government fiscal measures to improve the stability of the economy.

Also, the committee will review some business risk factors such as consumer and business confidence.