By Bawa Musah | 22 January, 2025
The Bank of Ghana’s Monetary Policy Committee (MPC) has started its first meeting of 2025 today, January 22, to analyze the country’s economic performance and propose strategies to maintain stability. This marks the 122nd session of the committee and will run for three days, concluding with a policy announcement on January 27.
Currently, the central bank’s policy rate stands at 27%, following a reduction in November 2024. The business community remains hopeful for another rate cut to ease borrowing costs, which they argue remain high despite previous reductions. High interest rates have stifled investment and economic growth, prompting calls for more effective measures to link policy rate changes to actual lending rates.
Inflation and exchange rate stability are key issues under review. Inflation rose to 23.8% in December 2024, surpassing the government’s end-of-year target of 15%. The increase was primarily fueled by higher food prices and earlier depreciation of the cedi. Businesses are keenly observing the meeting for measures that could alleviate these pressures and stabilize the economic environment.
During the MPC’s last session in November, Governor Dr. Ernest Addison highlighted the challenges of rising food prices, lingering currency pressures, and utility cost hikes, which have slowed the fight against inflation. While the November rate cut aimed to address these issues, its impact has been limited, particularly as businesses continue to face steep costs.
As the MPC deliberates, stakeholders are eager for policy decisions that will promote investment, curb inflation, and restore confidence in the economy. The committee’s actions this week are expected to set the tone for Ghana’s economic trajectory in 2025.
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