The Monetary Policy Committee of the Bank of Ghana (BoG) has kept the policy rate at 29%.

Addressing the media, Governor of the BoG, Dr. Ernest Addison, noted that the Committee took the decision to help keep inflation stable.

He explained that the latest forecast shows a slightly elevated inflation profile on account of recent exchange rate pressures and adjustments in transportation fares.

According to Dr. Addison, the projections show that inflation will remain within the monetary policy consultation clause of 13-17% at the end of the year.

“These forecasts are contingent on sustaining the tight monetary policy stance, including aggressive liquidity management operations. Given these considerations, the committee decided to maintain the Monetary Policy Rate at 29.0 percent”, he said.

On general macroeconomic conditions, he disclosed that the committee was of the view that while implementation of policies at the macro and structural reform level are consistent and align well with the tenets of the International Monetary Fund (IMF)-supported programme, there is the need to ensure that the recent depreciation of the currency does not become embedded into the pricing behaviour of businesses and on inflation expectations.

He stated that the strong reserve build-up of about $2.0 billion since the beginning of the IMF programme, the strong disinflation process, significant progress on fiscal policy consolidation, positive current account balances, and the good progress on the external debt restructuring process, have all worked together in concert to deliver enough buffers to support the exchange rate.

On fiscal policy, he announced that expenditures outpaced revenue growth in the first quarter, reflecting the frontloading of Independent Power Producers arrears payments.

He advised that maintaining strict fiscal discipline for the rest of the year will be crucial to strengthen confidence in the economy.