29/03/2025
We really don't understand the monetary stance of the bank of Ghana. Look at this. government borrowing at 15.5% and monetary policy rate at 28%.Government has disciplined itself to reduce its T bills rate down to 15. 5%. That's good news.
Now the routine chorus of government crowding the private sector is reduced. By this rate Banks will not have appetite for government Instruments. Their option will be to borrow to the private sector and find other innovative ways of investment.
You say food inflation and non food inflation are on the high, primarily caused by increased supply factors and your solution is a tight monetary policy ?
Bank of Ghana anchored with
1. Non performing loans getting better
2. inflation pressures caused by increased supply side and
3. government discipline.
4. 2024 growth generated primarily by the mining sector.
You are expected to reduce the monetary rate. at best maintain.
let's see how it go. we would have gone for 100 basis pt reduction to keep the rate at 26%.
more funds to the business sector, a reduction in the supply side risk to inflation and increase growth.
