The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has raised the policy rate by 300 basis points to 22 percent in order to stem the rising inflation rate and check the depreciation of the local currency, the cedi.
The BoG also raised the primary reserve requirement of banks from 12 percent to 15 percent in an effort to mop up liquidity in the economy.
According to local media reports on Friday, the policy decisions were some of the resolutions reached at the emergency meeting of the Monetary Policy Committee on Wednesday in Accra.
The reports added that the meeting also announced plans by the apex bank to purchase all foreign exchange earnings from voluntary repatriation of export proceeds from mining, oil and gas companies in order to shore up foreign exchange liquidity in the country.
“To boost the supply of foreign exchange to the economy, the BoG is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.
“This will strengthen the central bank’s foreign exchange auctions,” the reports quoted the central bank as saying in a statement issued after the meeting.
It will be recalled that Ghana has been battling to return its economy to the path of positive growth after the effects of Covid-19 by approaching the International Monetary Fund for bailout funds, while it strives to check rising inflation rate of 31.7 percent, low exchange rate of the Cedi and high debt stock.
GIK/APA