The Bank of Ghana (BoG) has reduced the policy rate to 18 percent from 20 percent.

The Governor of the BoG Dr Ernest Addison announced this at a press conference held on Monday (March 26, 2018).

Dr Addison said the decision is based on the central bank’s moves to achieve the annual inflation target.

The policy rate is the rate at which the central bank lends to commercial banks for onward lending to their customers.

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He added that prices of Ghana’s main primary exports on the international commodity market have rebounded over the first two months of 2018.

“Crude oil prices have gained the most since the fourth quarter of 2017 reaching $69.1 per barrel in January 2018, but have since moderated on the back of increased production and rising US shale output. Gold prices have also performed better, largely driven by a weak US dollar and steady purchase and holdings of gold by central banks. Following some price depression in 2017, on account of excess supply, cocoa prices are gradually on the mend. The main price drivers are strong grind data from Europe, and renewed concerns of adverse short-term weather patterns across the West African sub-region.”

He added that Prices of Ghana’s main primary exports on the international commodity market have rebounded somewhat over the first two months of 2018.

Crude oil prices have gained the most since the fourth quarter of 2017 reaching US$69.1 per barrel in January 2018, but have since moderated on the back of increased production and rising US shale output.

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Gold prices have also performed better, largely driven by a weak US dollar and steady purchase and holdings of gold by central banks. Following some price depression in 2017, on account of excess supply, cocoa prices are gradually on the mend.

The main price drivers are strong grind data from Europe and renewed concerns of adverse short-term weather patterns across the West African sub-region.

Meanwhile, the Central Bank has confirmed the implementation of the Ghana reference rate which will come into force next week.

This is expected to bring some transparency in the calculation of interest rate.

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