BANK OF GHANA MPC MEETING JANUARY 2021 – A BRIEF ANALYSIS

January-2021-MPC-Press-Release

Summary-of-Economic-Financial-Data-January-2021

BANK OF GHANA MPC MEETING JANUARY 2021 – A BRIEF ANALYSIS – A FOUR ARTICLE SERIES.

THE MONETARY POLICY COMMITTEE [MPC] OF THE BANK OF GHANA [BOG] HELD ITS FIRST 2021 MEETING LAST WEEK. I WILL GIVE A BRIEF ANALYSIS OF THIS MEETING IN FOUR PARTS. THE FIRST WILL EXAMINE THE MPC PRESS RELEASE. FURTHERMORE, I WILL DISCUSS THE ECONOMIC AND FINANCIAL DATA IN THREE MORE PARTS. AS USUAL, YOU CAN DOWNLOAD THE TWO DOCUMENTS AT THE BEGINNING OF EACH ARTICLE.

1] POSITION OF THE MPC

THE MPC FIRST LOOKS AT THE GLOBAL ECONOMIC SITUATION. THIS, ACCORDING TO THE MPC, IS STILL VERY MUCH INFLUENCED BY THE CORONA VIRUS PANDEMIC. THEREFORE, AS MUCH AS THERE ARE POSITIVE SIGNS GLOBALLY, THERE ARE STILL RISKS AND CHALLENGES.

OF COURSE, THESE RISKS AND CHALLENGES ALSO HAVE AN INFLUENCE ON THE GHANAIAN ECONOMY. THIS WE MUST CONSIDER ESPECIALLY AS A SECOND WAVE OF THE VIRUS AND MORE VARIANTS OCCUR. THESE DEVELOPMENTS LED TO MORE LOCKDOWNS AND OTHER RESTRICTIONS IMPOSED ON PEOPLE AND ECONOMY. THE MPC WAS NOT ABLE TO INCORPORATE THESE MEASURES IN THE PRESS RELEASE.

ON THE OTHER HAND, THE MPC IS WELL AWARE OF THE RISKS OF THE PANDEMIC. CONSEQUENTLY, IT POINTED OUT THESE RISKS AND IS RATHER CAUTIOUS CONCERNING THE DEVELOPMENT OF THE ECONOMY IN GHANA.

BUT, GENERALLY THE MPC SEES A RATHER POSITIVE OUTLOOK. THE BANKING SECTOR APPEARS TO BE STABILE. BUSINESS AND CONSUMER CONFIDENCE ARE ON A ONE-YEAR HIGH, AND ECONOMICAL ACTIVITIES ARE ON THE RISE. [A MORE INTENSIVE ANALYSIS WILL  FOLLOW IN THE NEXT ARTICLES.] THE MPC BASES THIS APPROACH ON FISCAL AND FINANCIAL MEASURES TAKEN BY THE GOVERNMENT AND THE BANK OF GHANA.

WEIGHING ALL THE POSITIVE DEVELOPMENTS AGAINST THE RISKS AND CHALLENGES, THE MPC LEAVES THE MONETARY POLICY RATE AT 14.5 PERCENT.

2] OWN CONCLUSION

I AGREE WITH THE POSITION OF THE MPC OF THE BANK OF GHANA. FOR MY UNDERSTANDING, IT WEIGHS POSITIVE ELEMENTS AND RISKS AND CHALLENGES IN JUST THE RIGHT WAY. IT WILL TAKE THE EFFORTS OF ALL INSTITUTIONS AS WELL AS THE ENTIRE POPULATION TO OVERCOME THE NEGATIVE PERSPECTIVE. BUT IF EVERYONE WORKS IN HIS OR HER OWN WAY TO GET OUT OF THE CRISIS, WE CAN MAKE IT.

THIS IS THE CONCLUSION OF “BANK OF GHANA MPC MEETING JANUARY 2021 – A BRIEF ANALYSIS”.

THE NEXT ARTICLE WILL DEAL WITH PRICE DEVELOPMENTS, REAL SECTOR INDICATORS, AND MONEY MARKET RATES.

SEE YA…

 

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