The Central Bank has reviewed the policy rate by 300 basis points from 19% to 22% after a Monetary Policy Committee meeting held on 17th August 2022..
The review was driven by the rapid depreciation of the cedi. According to the Bank of Ghana, the depreciation was occasioned by both external internal factors such as the increase in inflation in July and the intensified pressures on the foreign currency market.
To boost the supply of foreign exchange, the Central Bank noted that it is working with mining and oil and gas companies to purchase all foreign exchanges arising from voluntary repatriation of export proceeds.
The Committee will also raise the primary reserve requirement of banks from 12 percent to 15 percent to be implemented in a phased manner:
- 13 percent from 1st September, 2022
- 14 percent by 1st October, 2022
- 15 percent by 1st November, 2022
The Central Bank indicated that the ongoing discussion with the International Monetary Fund concerning the balance of payment support would address the country’s fiscal and debt sustainability challenges as well as shore up the international reserves of the country.