Ghana’s economy will once again come under scrutiny as the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) starts its 48th regular meeting on Monday, December 19, the fifth in the year.
The MPC, led by the Governor, Paa Kwesi Amissah Arthur will come under immense pressure to find solutions to deal with excessive spending. Some traders have already expressed concern about the value of the Ghana Cedi against the US dollar ahead of the general elections.
The MPC, made up of a team of seven economists and financial experts, would have to discuss thoroughly measures that will help stabilize the local cedi, which is currently trading between GH¢1.63 and GH¢1.64 against the U.S dollar.
Razia Khan, Head of Research at Standard Chartered Bank Plc earlier told BUSINESS GUIDE in an e-mail that “we expect the Bank of Ghana’s Prime Rate to remain on hold for now, although with the Ghana Cedi traditionally weakening in the run-up to Christmas, and inflation likely to turn the Central Bank may need to tighten rates in the new year.”
The economy has remained relatively stable but confronted with certain challenges such as high unemployment rate and lack of business confidence due to high interest rate or bank loans. Some policy think tanks and economists have also expressed worry about government’s debt level, which is about 41 percent of Gross Domestic Product (GDP).
And analysts, market watchers and some economists are still anxiously waiting to hear what the MPC will say about the work of the committee set up to oversee the determination of lending rates by banks.
Some economic indicators such as the country’s fiscal and trade deficits, foreign reserves, among other important indicators, are expected to be reviewed by the committee.
The MPC will make the necessary projections for the final quarter of this year and assess the business risk factors. The decision of the MPC will be announced at a press briefing on Wednesday, December 21.
Analysts are expected to evaluate the Central Bank’s assessment of the economy and suggest appropriate ways that will help stimulate the macro-economy.
The suggestions are expected to help the country ensure a stable and vibrant economic environment where adequate private sector participation is needed.
Source: Charles Nixon Yeboah
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