The Institute
of Economic Affairs (IEA) wants the Monetary Policy Committee of the Bank of
Ghana (BoG) to increase the monetary policy rate by another 100 to 150 basis
points to 20 or 20.5 percent.
This is ahead of the Central Bank's
MPC press conference on Monday, July 25 which might see the review of the MPR
to stem the high level of inflation in the country.
Currently, the MPR, the rate at which
the Bank of Ghana lends to commercial banks in the country, stands at 19
percent.
In a statement, the Director of
Research at the IEA, Dr. John Kwakye believes the proposed adjustment “will
narrow the inflation-PR gap, although the real PR will remain negative”.
“Further, the adjustment will signal
the MPC's unwavering commitment to fighting inflation and bringing it under
control. The adjustment will also send the right signal to, and help calm, the
markets,” the statement added.
Furthermore, the policy think tank
explained that the next meeting of the MPC in September 2022, when the Committee
would have had the benefit of two more inflation readings in July and August,
would give it a clearer sense of the trend for it to reposition the PR
accordingly.
Source: citinewsroom