Fitch Solutions Predicts BoG to Cut Policy Rate to 28% in March 2024

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At the upcoming Monetary Policy Committee meeting in March 2024, the Bank of Ghana is anticipated to lower the policy rate by an additional 100 basis points, to 28.00%, according to Fitch Solutions. The Central Bank would have chosen to cut the policy rate for the second time in a row in this instance.


According to a forecast made by Fitch Solutions in a recent article titled "More Interest Rate Cuts On The Way In Ghana, Following Cautious Start Of Easing Cycle," the BoG will likely lower the policy rate by an additional 100 basis points to 28.00% at the next MPC meeting in March. 

Over the next few months, inflation will continue to trend lower due in part to statistical base effects and the lag effect of monetary tightening."

Furthermore, Fitch Solutions is also forecasting an 800 basis points decline in the monetary policy rate to 22.0% in 2024. The firm pointed out that the disinflation process will continue throughout 2024, supported by base effects.


The report also alluded to a gradual improvement in investor sentiment and a $600 million International Monetary Fund disbursement, which is expected to keep the exchange rate stable at roughly GH¢12.00 to a dollar on the interbank market throughout quarter one of 2024.

In addition, Fitch Solutions emphasized that price pressures from imported goods and services are anticipated to remain limited over the coming months, supporting the ongoing disinflationary trend.

Related To This: Ghana and Zambia To Exit Default on Foreign-Currency Debt in 2024 - Fitch Reports

The Bank of Ghana recently reduced its policy rate to 29.00% on January 29, 2024, in line with Fitch Solutions' expectations of a monetary easing cycle prompted by a significant slowdown in inflation. The firm believes that the Bank of Ghana will cut the benchmark interest rate by another 700 basis points (bps) to 22.00% by year-end, following a 100bps cut to 29.00% on January 29.


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