Global oil prices could go up further – Prof Quartey backs BoG’s 14% policy rate

Economist Professor Peter Quartey has endorsed the Bank of Ghana's decision to keep its policy rate at 14%, citing the threat of rising global oil prices and persistent inflation. He emphasized that the decision was apt, given the uncertainty surrounding the global economy. "It's certainly a good move because if you look at the threats to our macro economy, you realise global oil prices have been going up and are likely to go up," he stated.

Professor Quartey affirmed that the outlook for oil prices remains uncertain, heightening the risks for Ghana's economy. He pointed out other pressures faced by consumers and businesses, including higher utility charges and fuel prices at the pump. Inflationary threats are also prevalent, as evidenced by utility increases and rising fuel prices.

Despite acknowledging that the Bank of Ghana could have raised the rate to counteract global economic pressures, Quartey cautioned that such a move could burden businesses with increased operational costs. "But that would not be ideal for businesses, would not be ideal for the cost of doing business," he cautioned.

Quartey supported the Bank of Ghana's approach, which involves closely monitoring developments before making its subsequent decision. He expressed confidence that the current strategy allows the bank to assess the situation before taking action. "And therefore, the bank is taking the approach of basically to watch the space a little bit and see how it comes out, and then we'll take a decision," he noted.

Ultimately, Professor Quartey endorsed the decision to maintain the policy rate, deeming it a positive step. "I I think it's certainly in the right direction," he concluded.