Monetary Policy
MPC Overview
Monday, 09 April 2018 11:07

The Mandate of the MPC

The mandate for the Monetary Policy Committee (MPC) is derived from section 27 of the Bank of Ghana Act 612 (2002). The Act requires the establishment of an MPC to be responsible for formulating and implementing policy in the areas of money, banking and credit with the main aim of maintaining stable prices conducive to balanced and stable economic growth as well as promoting and preserving monetary stability. The committee sets an interest rate it judges to be consistent with an inflation target and an objective of growth.

 

The Membership of the MPC

The Bank’s Monetary Policy Committee (MPC) is made up of seven (7) members – the Governor, the two Deputy Governors, the Head of the Bank’s Research Department, the Head of Financial Markets, and two external members appointed directly by the Minister of Finance. The external directors may either come from academia or from the private sector. The appointment of external members is designed to complement the expertise within the Bank of Ghana.


Current members are:

 

    1.   Dr. Ernest Addison, Governor
    2.   Dr. Maxwell Opoku-Afari, 1st Deputy Governor

    3.   Mrs. Elsie Addo Awadzi, 2nd Deputy Governor

    4.   Dr. Benjamin Amoah, Head, Research 

    5.   Mr. Stephen Opata, Head, Financial Markets

    6.   Dr. John Kwakye, External Member

    7.   Prof. Joshua Yindenaba Abor, External Member

 

Meeting Schedule

The BoG MPC meets six times each year to deliberate on the economy. The MPC meetings are held bi-monthly beginning February of each year. Each bi-monthly meeting runs for two days, normally Monday and Tuesday, followed by a press briefing on Wednesday.

 

Monetary Policy Framework

The Bank’s medium-term objective remains bringing down inflation to single digits. The inflation targets are announced each year and these targets are set jointly by the Central Bank and the Ministry of Finance. For the year 2015, the target band is 8±2 percent. The decisions of the Committee are based on consensus, and this is reached after individually debating the issues exhaustively and weighing the balance of risks to inflation and output.

 

Public Accountability and Transparency

The Bank of Ghana explains its policy actions and decisions on interest rates to the public. The thinking and the data that informs the decisions of the MPC is made public through a press release. Because transparency promotes credibility which in turn enhances efficiency of the transmission mechanism for monetary policy, members of the committee as well as staff of the bank often engage in public outreach through lectures and other official public engagements, to explain the MPC process to the wider public.