The Monetary Policy Committee of the Bank of Ghana has maintained its policy rate at 21 percent.
The Committee attributed its hold to the drop in the risk to inflation resulting from lower oil prices on the world market.
The Bank of Ghana in November 2014 increased the policy rate by 200 basis point to 21 percent from 19 percent and attributed the hike to moves to help tame inflation which at the time stood at 16.9 percent, the highest since March, 2010.
Inflation for the first month of this year, January dropped to 16.4 percent from the 17 percent recorded in December 2014.
Many economists had projected that the policy rate which is used by commercial banks to calculate their base rates will be maintained.
Economist Dr John Gatsi told Citi Business News maintaining the policy rate this time round will be prudent as prices of crude oil on the world market have dropped significantly.
’Maintenance is the prospective view; some of the major contributors to change in policy rate have been stable with the influence of crude oil and downstream prices has gone down hence their contribution to build up to inflation has been slow and at the same time the year has begun with a marginal reduction in inflation.’’
Credit: citifmonline