The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has started to hold its 116th Regular Meetings from today, Tuesday, 23rd January 2024, to Friday, 26th January 2024, to review developments in the economy.

The meetings will conclude with a press conference on Monday, 29th January 2024, to announce the decision of the Committee.

The meetings come a few days after Bank of Ghana Governor Ernest Addison revealed that the banking sector remains “sound, liquid, and profitable” and that the apex bank was on course to implementing measures to further cut down inflation.

Speaking at a joint press conference following the successful first review by the International Monetary Fund of Ghana’s $3-billion extended credit facility, Dr Addison said the Bank of Ghana will continue to closely monitor banks’ capital restoration efforts in line with approved plans, including through support from the Ghana Financial Stability Fund, following the impact of the Domestic Debt Exchange Programme (DDEP).

“We expect early recapitalisation to promote the banking sector resilience and effective financial intermediation to help speed up macroeconomic economic recovery going forward,” he added. He noted that with the successful conclusion of the first review, the country needs to start thinking of the second review of the programme and beyond.

Dr Addison noted that while tentative indications point to sound implementation of policies through to December 2023, vigilance and commitment will be needed in 2024 to undertake all the structural reforms envisaged under the programme.

Implementation of Reforms

The implementation of these reforms to ensure the economy functions well will be critical, he noted. He observed that “although a challenging year confronts us, we remain confident about the ongoing economic recovery process and would want to stress the importance of executing the needed structural reforms to support a better functioning of the economy”.

“These structural reforms will be in ensuring long term sustainability of performance”, he added. Specifically, on inflation, Dr Addison said the Bank of Ghana will work on delivering its mandate on price and financial stability.

The recent trends in inflation that the economy has witnessed in the course of 2023, he pointed out, “suggest that we are on course. A year ago, at this time, inflation was at around 54 per cent”, Dr Addison recalled, indicating that “Through strong and innovative policies, tight monetary conditions, and relative exchange rate stability, inflation has been more than halved by the end of 2023 and is currently reported at 23 per cent,” he noted.

Dr Addison noted that several factors have supported the disinflation process, and these include monetary policy stance throughout 2023, stable crude oil prices which led to stable fuel prices with favourable impact on transportation costs, a relatively stable exchange rate environment, stronger FX reserve accumulation due to the gold-for-reserve programmes and favourable climatic conditions on the food supply chain process.

Looking ahead to 2024, Dr Addison said “our expectation is for inflation to ease further, underpinned by continued implementation of sound policies until inflation expectations are firmly anchored towards our single digit objective”.

In this regard, he announced that the Bank of Ghana will continue to monitor both domestic and external developments and respond appropriately to ensure that the downward inflation trajectory observed in recent months is sustained without undermining growth. “The 2023 experience of a strong reduction in inflation and stronger growth is instructive”, he added.