Bank of Ghana maintains policy rate at 13.5%
The Bank of Ghana has maintained its policy rate at 13.5%.
The announcement was made by the governor of the central bank, Kwesi Amissah-Arthur at a press conference this morning at the bank.
He observed that almost a year after most advanced economies started putting in place stimulus economic packages and adopting unconventional monetary policy tools to address weak economic conditions and prevent a global depression, conditions in most of these economies are yet to return to normal.
He said there is continued sluggishness in the world economy, especially in the United States and Europe’s debt crisis is causing some uncertainty.
“At the July 2010 Monetary Policy Committee meeting, the indication from trends in the Bank of Ghana’s Composite Index of Economic Activity (CIEA) at the end of the first quarter of 2010 was that economic activity had begun to pick up,” he said.
He said, “this trend has continued to date. As at July 2010, the index had recorded a real growth of 3.5 percent compared with a growth of 2.5 percent for the corresponding period of 2009.”
According to Amissah-Artur, overall Business Confidence has been positive for most of the year although there was a marginal dip in August 2010. Businesses assessment of trends in interest rate and consumer price movements were favourable. However businesses were less optimistic about the realization of government’s growth target for the year.
Touching on the interest rate structure among other factors, he sqid the developments in Money Market activities since the July 2010 meeting continue to reflect the easing of inflation expectations. A strong non-resident investor demand has contributed to the lengthening of the average maturity.
Interest rates, he said have declined over the entire spectrum of the yield curves with observed further shifts towards long-dated instruments. The share of the short-dated government securities went down to 38.8 per cent in August 2010 from 39.8 per cent in June 2010.
By Emmanuel K. Dogbevi