The central bank’s Monetary Policy Committee (MPC) has lowered the policy rate by 100 basis points at 13.5 percent from 14.5 percent.

Announcing the decision at its 100th MPC press conference, Governor of the Bank of Dr. Ernest Addison on May 31 said this was based on risks to the country’s inflation outlook remaining muted in the near term.

He added that consumer inflation is expected to remain within the central bank’s target band of 8% plus or minus two percentage points in the next quarter after falling to 8.5% in April 2021 due to lower food price inflation.

“Risks to the inflation outlook remain muted in the near-term under these circumstances, the Monetary Policy Committee under these circumstances decided to lower the monetary policy rate by a hundred basis points to 13.5%,” the governor said.

“The Committee will continue to monitor price developments closely and take appropriate action, where necessary, to contain all potential pressures to the inflation outlook,” Dr Addison added.

The policy rate is of key interest to businesses operating in the country as it influences the interest rate on loans and determines the rate at which the central bank lends to commercial banks.