We are concerned about inflation outlook when it comes to MPC decisions – BoG Governor

Bank of Ghana Governor Dr Johnson Asiama has commented on the Monetary Policy Committee's (MPC) focus on inflation outlook for their decision-making process. The MPC's choices are influenced by their evaluation of where inflation is projected to go and the potential risks that might impact the outlook. According to Dr Asiama, the committee's decisions are always centered around the inflation outlook for the economy.

During the MPC Educational Observership Programme, which introduces Economics and Business students from universities to the central bank's monetary policy process, Dr Asiama explained that recent developments in the Middle East have influenced their recent decision to maintain the policy rate. This decision was made two months ago, as he had initially planned to begin the easing cycle.

However, fresh developments in the Middle East could affect end-year inflation, prompting the decision to hold the policy rate and prevent further inflation increase in the coming months. Regarding the decision-making process, Dr Asiama revealed that the MPC now primarily uses majority decisions instead of seeking consensus. He noted that a consensus-based approach could limit members from expressing their individual views.

Dr Asiama emphasized the independence of MPC members, stressing that they are expected to voice their opinions without being swayed by the Governor's input. Furthermore, he highlighted inflation expectations as a crucial factor in determining the policy rate, with a dedicated team conducting research to guide their decisions.