Monetary Policy Committee of the Bank of Ghana keeps the policy rate at 14 percent | (20-05-26)

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[00:00:00]If bankers who are industry players deserve such a treatment, what do you have for us who don't are non-industry players? Can we also have a post MPC review like we used to it used to exist but it seemed to be scrapped. Thank you.

[00:00:16]Um we noticed that gross gross reserves grew to about 14.4 billion and by May 18 from 13.9. What accounted for the jump? It doesn't seem that clear.

[00:00:33]And lastly, Governor, we have had two rounds of your three eye conference, yet the ECD seemed to be a mirage upon us.

[00:00:43]I know that it was on the cusp of being launched until certain financial crisis disrupted the whole process. Now we have resilience, we have stability. When is the ECD due? Because AI is seriously catching up on us. Thank you, >> Governor. My name is Francis Into. I work with the Ghanaian News Agency.

[00:01:07]Considering what happened last year on BOG losses, what strategic options is the BOG construding to reduce its losses? And do you know any guess perhaps the percentage that you are looking at to reducing your losses that you incured last year?

[00:01:32]>> Um hello governor my name is Khal Zen from Joy News. Um I wanted to find out you mentioned that dollar um demand has gone up but also on the supply side has dollar supply reduced in the past few months and if it has is the BG um strategically using its reserve to support the markets as and when? Thank you.

[00:01:57]>> Hello. Yes, Governor. Uh domestic debt continue to rise. My question is simple.

[00:02:04]Should we be worried?

[00:02:17]>> Thank you very much governor. Um the name is justice sha news agency. So you spoke about risk and my question is a bit linked to what um Francis asked. So going forward um what are the risks you envisage in your monetary policy operations and um what are going to be the tradeoffs so that you could tell Ghanaians ahead of time that these are the risks that we encounter especially in financial risks but these are the tradeoffs that would even show off at the end to ensure that the economy remains resilient. Um secondly also when you spoke about the high demand for dollar where are some of the which are what are some of the sectors that are kind of inducing this high demand because some of the things we've heard is the contractors for instance some of them who don't need to import you know equipment because they can get it to rent here from plant pools rather tend to import equipment unnecessarily when they receive government contract. But are there other sectors like that that are putting pressure on the dollar? Then my third question is about your the recently held um threei conference.

[00:03:41]Um I had an eye openen. And I saw a lot of um you know informal you know workers around and I was thinking about the gig economy. Um does the bank you know have data on the nature of the gig economy in Ghana you know its size and scope and its impact on the entire economy. Thank you.

[00:04:04]>> Right. Um justice you took the opportunity to take all the other questions that I would have allowed to be asked. So on that note, I would say that this concludes Thanks everyone for staying on this is still business life. Coming up in this bullet, the monetary policy committee of the bank of Ghana keeps the policy rate at 14%.

[00:05:07]>> The committee assessed risks in the outlook to inflation and growth as broadly balanced and decided decided to maintain the monetary policy rate at 14.0%.

[00:05:21]>> We have more from the governor plus engage the thoughts of an economist.

[00:05:24]Also in this bulletin, data from minerals income and investment fund shows royalties crosses 2 billion cities in first quarter of 2026. We shall be telling you more.

[00:05:36]Plus today on the joy business van, we take you inside the tech auto center where technology and craftsmanship are making it go to destination for auto repairs.

[00:05:48]We have details of this and more for you. Please stay on. Everything from private vehicles to commercial fleets.

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[00:07:02]Before you could stay on, I am paired back. The monetary policy committee of the bank of Ghana has kept the policy rate at 14%.

[00:07:30]According to the committee, the ongoing Middle East conflict has broadly weakened global growth. While on the domestic front, both consu and business confidence, though high, have softened.

[00:07:39]Here's Governor Dr. Johnson announcing the rate a while ago.

[00:07:44]>> The quarterly adjustment mechanism for utility tariffs could exert upward pressure on non-food inflation in the coming months. But however, relative exchange rate stability, increasing reserve buffers and continued fiscal discipline are expected to help moderate these upside risk. Based on the above considerations, the committee assessed risks in the outlook to inflation and growth as broadly balanced and decided decided to maintain the monetary policy rate at 14.0%.

[00:08:22]The committee will continue to monitor incoming data in particular relating to potential spillover of the geopolitical tensions to the domestic economy and take appropriate policy actions when necessary.

[00:08:37]The committee took yet another an additional measure. The committee decided to amend the dynamic cash reserve ratio to a uniform ratio of 20% maintained in the domestic currency effective June 4, 2026.

[00:08:55]The next monetary policy committee meeting is scheduled for July 20 to 22, 2026 and that meeting will also conclude on July 22nd, 2026 with the announcement of the policy decision.

[00:09:12]>> Dr. Adulusia is a senior lecturer at the department of economics of the University of Ghana. He's also the executive director of the center for policy scrutiny. Joins us voom for some analysis on the back of this. Thank you very much sir for agreeing to speak to us here on business life and I would like to start off with your initial thoughts about the hold in the policy rate expected you will say Dr. Sakodia's line has frozen. I'm told um we shall ensure he comes on smoothly for us to have this conversation. But in the meantime, we also know that um as you know have it, Ghana's mineral royalty receipts recorded a significant increase in the first quarter of 2026 with total inflows rising to more than two billion cities according to new data by the Minerals Income and Investment Fund.

[00:10:10]More this report. Quarter one performance also signals a positive outlook for the year. Following the fund's historic achievement of crossing 5 billion Ghana cities in royalty receipt in 2025, the first time such a milestone has been recorded in the history of the fund. The figures showed that total mineral royalties increase from 1.43 billion Ghana cities in the first quarter of 2025 to 2.01 01 billion Ghana cities in the corresponding period of 2026 representing a 40% increase in revenue mobilization. The actual collections also exceeded mineral income investment funds first quarter 2026 forecast of 1.57 billion Ghana cities by 28%. Large scale gold mining remain the biggest contributor to royalty received during the period under review generating 1.97 billion Ghana cities in the first quarter of 2026 compared to 1.35 billion Ghana cities recorded during the same period in 2025 represent a 46% year-on-year increase exceeding its projected target of 1.49 billion Ghana cities by 33%. The growth was driven largely by high gold prices and increased production compared to the previous year. The sharp increase further reinforces the sector's dominance in Ghana's extractive industry and indicates sustained investor confidence and stronger royalty performance from major gold producing companies.

[00:11:40]Back to earlier story um where we had um Dr. Sakodia sharing his perspective with us on the back of the hold in the policy rate. thankfully joins us again. Um, thank you very much, sir. And I was asking you to tell us about your thoughts concerning the holding the policy.

[00:11:55]>> Well, thanks for having me and sorry for the earlier hiccup. Well, I mean the inflation in Ghana is not too high or is not rising fast to around an increment in the policy rate. In any case, one would expect a reduction in the monetary policy rate from 14 to maybe 12. But the governor has also given an indication of the risk ahead. The geopolitical tension poses serious risk to import bills feeding into inflation. You also mentioned the second wave effect of inflation. That is when inflation is high workers will agitate for higher wages to keep their real wage the same.

[00:12:41]So when workers succeed in negotiating for higher wages, producers will also increase their prices so that they can maintain their profit. So he was also careful about the second wave of inflation wave effect sorry second effect of uh inflation. So these two reasons uh have been given as the main the rational behind the maintenance of the policy rate no increment no reduction they want to assess situations but which I agree with them. So hopefully by July the war will be over and then we all know someone will say our smoothness level. We know what will happen whether they have to adjust it or not.

[00:13:27]>> And I appreciate your prophetic declaration there. But um I want to understand this is maintaining the 14% mainly about defending the ceiling protecting import cover. How effective has that been so far?

[00:13:39]>> You mean the history of the 14%? Yeah.

[00:13:42]In the past. Yeah. Well, he also mentioned the connection. I think somebody asked about the connection between monetary policy rate and the the lending rate, there seems to be a weaker correlation between the two. Um and and and when you see that whenever policy rate is increased then the lending rate will increase faster. So when it's upward adjustment the correlation is strong but when it's downward adjustment the correlation is weak. and and that's why people always say that prices are sticking downward. So we want to see a further reduction in lending rate so that businesses can borrow at a lower cost. But with regards to um the exchange rate I think the exchange rate movement having a depreciation rate of about 8% is not too bad or too bad or bad for the economy. Even though you know Ghana we practice the dirty floating we allow the city to depreciate within a range. We do not know in Ghana our upper band and our lower band but we can infer from equas equas target is + 10 minus 10. So to the extent that our appreciation and depreciation is within + 10 and minus 10 it's okay according to eas but I don't know about Ghana but I think we should adopt the equas range of + 10 - 10. Well, with with Ghana now under the PCI and off the IMF financing, how important is the policy rate as a tool for signaling credibility to foreign investors and on the back of this maintenance?

[00:15:15]>> Yeah. Yes. Uh I mean we all know that we face risk, geopolitical tension, risk, but our domestic economy uh the macros are doing well. The macros are pointing to the right direction. what we are waiting for is how to expand the economy and and create wealth and create jobs and and so with regards to the macros and the the credit rating that we've gotten it it puts a a signal a good signal to the investor community the risk the uncertainty about how we can manage our economy the trust that they have about Ghanaian to be able to manage our economy in the absence of IMF was always going to be risky and that is why some people are of the view that it is good to still have them with us with through the PCI. So that the PCI is only an advisory not a bailout not a program but it only signal to the market and send a good signal to the uh investors that hey we are still with Ghana so you are safe to do business with them. But then again, how does keeping the rate at 14% fit with government's goal of crowding in private sector investment under the same PCI uh program we are on?

[00:16:29]Well, that's what I'm saying that the PCI is only advisory. So uh most of the the the work should be done by the government of Ghana, the bank of Ghana and the ministry of finance. So maintaining at 14%, we only want to see a strong correlation between that and the lending rate. As for the international community, they are always looking at the how trustworthy these rates can be. Now, of course, we can trust the rates. So, I believe that they will respond and come and do business with that because you also have to look at the MPC rates and nominal interest rate and real interest rates to the extent that inflation is very low around 3.4%.

[00:17:10]Real interest rate is high enough to attract you know uh investors. So I'm sure they will respond positively.

[00:17:17]>> And for businesses, what should they expect from now till the at least um the next 3 months?

[00:17:23]>> Well, the businesses should expect uh now the MPR has been maintained. Uh so you do not expect any major changes or adjustment in the lending rate as far as the banking lending rates are concerned.

[00:17:38]uh but they should take advantage of the stability that we have and expand and then and and get more credit from the banks. We also want to appeal to the banks that they will lend more money to the uh businesses so that they can grow and expand and create jobs as we all know. So the emphasis here is on the credit growth and I think the governor mentioned that the real private sector credit growth is up around 24%. Which is good news. Now the question is is the credit going into domestic growth or is going to importation because the same governor also said that import bills are likely to be high because of the geopolitical tension. So we want to see the growth in the real private se credit going into domestic production and not importation because if they go into importation then we will end up developing somebody's country end up creating jobs in a foreign land but those credit must go to domestic producers so that the benefits will be derived from the domestic economy.

[00:18:40]>> Dr. Edu, thank you very much for your time here on Business Life. Let's now pause for a breather. I'll be right back with a joy business van.

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[00:22:25]Hello again. Welcome back to Business Live. And now to the Joy Business Van.

[00:22:29]Keeping vehicles on the road is a big business and behind every smooth running car is a skilled mechanic. In a time when transportation, powers, commerce and daily life, auto repair shops have become an essential part of the economy.

[00:22:42]Today we take you inside Auto Center where technology, craftsmanship and customer trust are driving growth and making it to the gold destination for auto repairs.

[00:22:52]>> Hello Joy business van. This is Lassis Oseni, the CEO of Last Tech Auto Center.

[00:22:59]You are welcome to our Amazon branch located at Amazon in Ara. Last Auto Centers built a reputation for servicing everything from private vehicles to commercial fleets. The workshop handles routine maintenance, engine diagnostics, suspension repairs, electrical faults, and body work. Like many small and medium-siz enterprises, the business operates in a competitive environment where speed, reliability, and customer satisfaction are critical. Lassi Useni is owner.

[00:23:41]It was not easy journey.

[00:23:44]Uh I was with Silver Star Limited some years back. worked with them for almost 10 years. That's where I started planning for the business. So we started here 2018 and then uh gradually by the grace of Jehovah we move to this level the on the auto there's a lot of challenging on the auto so I decided to expand the business by doing aside the auto body works. We do mechanical maintenance, we do electricals, we do auto upholstery, we do spraying and then body works. So I can say we do everything concerning auto. Running a modern auto repair shop goes far beyond turning wrenches. Today's vehicles rely heavily on computerized systems requiring specialized diagnostic equipment and technical expertise. At last auto center mechanics combine hands-on experience with digital tools to identify falls quickly and reduce downtime for customers in auto especially the body work or asen repairs. Most people don't have the good or the proper equipment for asen repairs. But by the grace of Jehovah, I managed to order a select bench or chassis liner that will enable us to stretch stretch as cars. So if the impact is so great that it has affected the chassis or the frame. So because they don't have the that machine in town, they do their best, but most of the cars come back to me for a correction. So I have to put on the chassis liner to make sure the frames in the chassis is well straightened. So when you're driving the car, the car will not be dragging into one one side.

[00:25:47]Uhhuh. So those are the challenges uh we face here. We do corrections a lot.

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[00:26:36]For customers, trust is one of the most valuable currencies in the repair business. A reliable mechanic can mean fewer breakdowns, lower maintenance costs, and safer journeys. But beyond repairs, workshops like this also contribute to local employment and skills development.

[00:26:54]>> Already we train some some have graduated here already and they working on their own. But currently now we have about uh eight to nine of them that we are training now. Uh some of them are at the other shop at our grocery shop. So too and some are also here with us. The automotive repair industry is evolving rapidly. Mechanics are now preparing for hybrid and electric vehicles while adapting to changing consumer expectations and economic pressures.

[00:27:20]Lassi says staying competitive means investing in equipment, staff development and customer service. our future plans. We have a lot of plans uh behind us here. We have another plot.

[00:27:32]There's another plot behind us which we've already fenced already. So we are hoping that by next year we start the expansion bit by bit so that we can have at least two plots combined so that we can do a standard workshop.

[00:27:49]As vehicles become more advanced the role of the modern mechanic is changing alongside them. For businesses like Lasttech Auto Center, Faxes depends not only on technical skill, but also on trust, adaptability, and service quality.

[00:28:27]Thanks so much for watching business life for today. I am Paios Kojobaka.

[00:28:31]Remember business life on Joy News was brought to you by Echo Bank, the Panaffrican Bank and Telis connecting energies.

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[00:30:04]From Africa to football's biggest stage.