BoG may retain 14% policy rate amid global trends — Analyst

Finance and tax analyst Nelson Cudjoe Kuagbedzi has projected that the Bank of Ghana will maintain its policy rate at 14 percent as the central bank wraps up its 130th Monetary Policy Committee (MPC) meeting today.

He explained that the anticipated decision aligns with global monetary policy trends, where several major central banks have opted to keep interest rates unchanged amid ongoing geopolitical tensions and evolving inflation dynamics.

Speaking in an interview with Citi Business News, Mr. Kuagbedzi noted that central banks in advanced economies have largely adopted a cautious “wait-and-see” approach.

“Looking at the global trend, which is mainly driven by geopolitical tensions, we expect the central bank not to hike, not to cut, but rather maintain the policy rate at 14 percent,” he said.

He cited the European Central Bank, which maintained its policy rate at 2 percent on April 30, marking its fifth consecutive hold. He also referenced the United States Federal Reserve, which kept its benchmark rate between 3.50 and 3.75 percent on April 29.

According to him, the Bank of England has similarly maintained its interest rate despite inflationary pressures remaining above target.

“The global central banks have just told us what to do. The European Central Bank held the policy rate at 2 percent on April 30 — that is actually the fifth consecutive hold,” he added.

Mr. Kuagbedzi further observed that the Bank of Japan remains the only major central bank currently pursuing a tightening stance, with expectations that its policy rate could rise to about 1 percent by the end of the year.

He noted that the Bank of Ghana will have to balance price stability with the need to support economic growth in its policy decision.

“The Bank of Ghana will certainly consider the balance between price stability and growth… and so we believe there is still more room to contain inflationary pressures,” he said.

The Bank of Ghana is expected to announce its monetary policy decision later today following the conclusion of its 130th MPC meeting.