The Monetary Policy Rate (MPR) of the Bank of Ghana is expected do down between 1.0 and 1.5 percentage points at the next Monetary Policy Committee (MPC) meeting next week.
According to IC Research, the decline in inflation to 20.4% in August 2024 and an earlier cut in US interest rate by the Federal Reserve makes a strong case for a cut in the Bank of Ghana’s policy rate.
This is expected to reduce interest rates and cost of borrowing.
The research arm of IC Securities said headline inflation unexpectedly declined in August 2024, raising its anticipation of dovish sentiments at the forthcoming Monetary Policy Committee meeting in late-September 2024.
“The case for policy rate cut gets stronger, given a higher real policy rate and prospect of earlier FED rate cut. At the current inflation rate, Ghana’s ex-post real policy rate rises to 8.6%. This stands at 180bps [basis points] above the December 2023 real policy rate which triggered a 100bps cut at the January 2024 MPC meeting”.
Relative to peers, IC Research, said Ghana’s real policy rate appears slightly higher with Kenya’s real rate at 8.35% and Uganda’s at 6.50%.
“Our forecast disinflation in September 2024 suggests an even higher ex-ante real policy rate of 10.0%”, it mentioned.
This, it said, strengthens the case for a cut in Ghana’s nominal policy rate with low risk of losing attractiveness on Ghana cedi-denominated assets.
The anticipated cut in the US Fed rate, which will precede Ghana’s MPC decision, will also narrow the interest rate differential on US dollar Ghana cedi and support between 100 – 150bps cut in Ghana’s Monetary Policy Rate, it concluded.
Latest Stories
-
GIPC opens entries for 21st Ghana Club 100 Awards
1 min -
YEA & Ghana Report Summit launch 16-day Job, Entrepreneurship Fair
29 mins -
‘Baseless and Unfounded’ – Ministerial Committee refutes NPP Chair’s allegations of bribery in labour strike talks
39 mins -
EC approves 13 presidential aspirants for 2024 elections
43 mins -
Academic City empowers GES STEM teachers on AI
56 mins -
Akufo-Addo leads final funeral rites of Joe Lartey Sr
1 hour -
I only scored important goals – Michael Essien
1 hour -
Deaths of patients with pre-eclampsia left me scared that I could die from it – Nurse
1 hour -
Nathaniel Attoh: Learning at the feet of a legend – Ode to Joe Lartey
2 hours -
Africa Remittance Conference UK scheduled for September 21, 2024
2 hours -
Health Ministry to roll out major herbal medicines onto NHIS
2 hours -
Inflation to ease to 19% in September 2024
2 hours -
‘Fix the country member’ discharged -Barker-Vormawor
2 hours -
Policy rate to go down between 1.0% and 1.5% – Report
2 hours -
Citizens may revolt against the extremely partisan Parliament that has failed to deliver – Bagbin warns
2 hours