Investors may be compelled to sell their cedi holdings, if the MPC committee decides to hold the policy rate at 22 percent.
Financial experts have expressed verified opinion in their response to a question on whether the policy rate could be an effective measure to tame the galloping inflation which currently is around 31.7%.
This means that cost of credit to households and the private sector would rise steadily in the next couple of months.
The ratings released last week, projected annual average inflation of 22% in 2022, slowing to 16% in 2023. Fitch's projection is better than Ghana government's revised projected end year inflation of 28.5% as presented by the Finance Minister, Ken Ofori-Atta, during the presentation of the mid-year review budget to parliament, fortnight ago.
the revision of the end-period inflation for 2022, as part of the re-jigging of the entire macroeconomic framework, has been necessitated by a significantly-changed macroeconomic environment.
The figure means that the Month-on-month inflation between May 2022 and June 2022 stood at 3.0 percent.
The Monetary Policy Committee, (MPC) will from this week begin to review the health of the economy and also announce a new policy rate for the next couple of months. But there strong indication that the BoG would hike the policy rate further in attempt to anchor inflation.
According to the Central Bank agriculture has broader implications on the economy, including price stability, exchange rate stability and generation export revenues from the sector.
They believe the Bank of Ghana’s measures put in place to curb the consistent rise in inflation are either not working or the situation is not being diagnosed properly. Both, are thereby calling on the government through the finance ministry to consider other factors such as the fiscal space.
This has therefore lay bare the inflation targeting regime of the central bank, which it uses to control economy in terms of currency exchange rate and rate of economic growth, to criticisms by some economists as to whether it real works the magic or it is a 'try your luck' theory.