BANK OF GHANA
Monetary Policy Summary

YRAUNAJ
NKOFGHA
A N
B A
EST.1957

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PREFACE
The Bank of Ghana’s Monetary Policy Summary provides a brief overview of macroeconomic developments
and monetary policy considerations, released after each MPC meeting in January, May, July and
November. After meetings in March and September, a full Monetary Policy Report is published. The aim of
issuing these monetary policy publications is to provide the public with background materials which served
as inputs for the policy decision making process and economic assessments at each MPC session. Through
the publication of these documents, Bank of Ghana aims to promote accountability of its decision making
and build understanding of the monetary policy formulation process among stakeholders.
Monetary Policy in Ghana
The primary objective of the Bank of Ghana is to pursue sound monetary policies aimed at price stability
and creating an enabling environment for sustainable economic growth. Price stability in this context is
defined as a medium-term inflation target of 8 percent with a symmetric band of ±2 percent, for which the
economy is expected to grow at its full potential without excessive inflation pressures. Other tasks for the
Bank of Ghana include promoting and maintaining a sound financial sector and payment systems through
effective regulation and supervision. This is important for intermediation since risks associated with financial
markets are taken into account in monetary policy formulation.
Monetary Policy Strategy
To achieve the objective of price stability, Bank of Ghana was granted operational independence to employ
whichever policy tools were deemed appropriate to stabilise inflation around the medium-term target. The
Bank of Ghana’s framework for conducting monetary policy is Inflation Targeting (IT), in which the central
bank uses the Monetary Policy Rate (MPR) as the primary policy tool to set the monetary policy stance and
anchor inflation expectations in the economy.
The MPC Process
The MPC is a statutorily constituted body by the Bank of Ghana Act to formulate monetary policy. The MPC
consists of seven members – five from the Bank of Ghana (including the Governor who acts as the
Chairman) and two external members appointed by the Board of the Bank of Ghana. The MPC meets once
in every two months to assess economic conditions and risks to the inflation outlook, after which a policy
decision is made on positioning the MPR. Each MPR decision provides a signal of tightening (increase),
loosening (decrease) or maintaining (no change) the monetary policy stance. The MPC meeting dates are
determined well in advance at the beginning of each year. The policy decision is arrived at by consensus
with each member stating reasons underlying a preferred rate decision. An MPC policy statement is
published via a press release, and a press conference is held, after each MPC meeting to communicate and
explain the Committee’s decisions to the financial markets and the general public.
Monetary Policy Summary /January 2017

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Contents
Monetary Policy Summary /January 2017

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Moderate recovery continues in global economy
The global recovery process continued at a moderate pace,
hindered by heightened policy uncertainties in the US and
Euro Area, volatile commodity prices and rebalancing in
China. It is however expected that growth in the advanced
economies will pick up pace in 2017 on the back of expected
tax cuts and increased infrastructure spending, especially in
the U.S. The fiscal stimulus will boost trade in the Euro Area
and Japan and further strengthen the recovery efforts.
Growth in emerging economies is also expected to pick up in
2017 driven mainly by the recovery in commodity prices,
sustained growth in China and India, end of recession in the
largest emerging economies such as Russia and Brazil, and a
pickup in global trade. However, higher yields and stronger
dollar may increase external financing costs. In addition,
exports may decline if the US goes ahead with protectionist
trade policies. Tighter immigration policies in the US may also
reduce remittance flows to emerging economies.
In Sub-Saharan Africa, growth was constrained by mounting
domestic imbalances particularly in Nigeria and South Africa,
and a slow recovery in commodity prices during 2016. The
recent recovery in commodity prices is therefore expected to
boost growth in Sub-Saharan African countries in 2017.
Global growth projected to pick up pace in 2017
However, the continuing domestic imbalance in the two largest
economies on the African continent will remain a major risk to 5
the regional growth outlook. 4.5

Global financial markets have also recovered somewhat, 3.5
despite lingering doubts about the strength of the recoveries in 3
2.5
the Euro Area and Japan. Stocks in the U.S have rebounded

due to the stronger than expected growth in the third quarter
1.5
and the prospects of stronger growth in 2017. The Fed is also

expected to continue gradual increases in interest rates as
0.5
growth prospects strengthen in the U.S.

Advanced Emerging market World
economies and developing
On the whole, risks to the global economic outlook appear to
economies
be broadly balanced. But, upside risks such as a stronger US
2014 2015 2016 2017
dollar and rising global bond yields, on the back of expected
hikes in the Fed funds rate, could impact adversely on Source: IMF World Economic Outlook, January 2017
Ghana’s balance of payments, fiscal operations and the
inflation outlook.
Monetary Policy Summary /January 2017

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Commodity prices remain volatile but some may
pick up Cocoa, gold, and crude oil prices remained volatile in
2016 (Jan-14=100)
International prices of Ghana’s three key export commodities
140.0
were volatile throughout last year. Average gold prices
recovered in the year due to an increase in financial market 120.0
volatilities and the expected Fed rate hike, posting a 7.6 per 100.0
cent annual rise. Brent crude oil prices also rebounded in the
80.0
later part of 2016, following the consensus reached by OPEC
60.0
to cut production. On year-on-year basis, crude oil prices
moved up by 41.1 per cent. Cocoa prices however, declined 40.0
on the futures market underscored by projected excess
20.0
supply. On year-on-year basis, cocoa prices declined by 31.3
0.0
per cent.
The January 2017 Commodity Markets Outlook by the World
Bank indicates that some key commodity prices may pick up in
2017. In particular, cocoa price is projected to average about Balance of payments records the first surplus in 5 years
US$2,940 per tonne in 2017 from US$2,850 in 2016.
Underlining this cocoa price projections are declines in output
in West Africa and a pick-up in global demand. Oil prices are
also projected to increase to US$55 per barrel in 2017 from an
average of US$44 per barrel in 2016 because of increased
global demand and the OPEC output cut. However, gold
prices are projected to decline from an average of US$1,249
per fine ounce in 2016 to US$1,219 in 2017 due largely to an
expected strengthening of the US dollar. Some other optimistic
forecasts project gold prices to range between US$1,331 -
US$1,500 fine ounce on the back of dwindling number of new
gold mines and soaring of global investment demand. These
price developments, coupled with the expected increase in
export volumes, should improve Ghana’s trade balance in the Trade account improves on the back of increased
export receipts (US$ m)
short-to-medium term.
Balance of payments turns positive after five
years
For the first time since 2011, the provisional balance of
payments in 2016 recorded a surplus. This largely reflected an
improvement in the trade balance driven by a rise in gold
export receipts and a fall in oil import prices. The improvement
more than compensated for the moderation in the capital and
financial accounts arising from lower official foreign inflows.
In 2016, the trade balance improved from a deficit of
US$3.1bn in 2015 to a deficit of US$1.7bn due to an increase
in exports receipts by 7.2 per cent and a decline in imports by
5.3 per cent. The services and income accounts also recorded
appreciable improvement during the year, but the transfers
Monetary Policy Summary /January 2017
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Cocoa Gold Oil


noillim'$SU

Exports Imports Trade Balance

Pag e | 3
account was impacted adversely by delays in grant
The balance of payments surplus reflects an improved
disbursements and reduced remittance inflows. Consequently,
current account balance
the provisional estimates of the current account deficit
5,000 0.7
improved to US$2.6bn in 2016 compared with US$2.8bn in

The capital and financial account surplus reduced by 5.8 per 1,000
0.2
cent due to a marginal increase in foreign direct investment -
0.1
coupled with lower portfolio inflows and official loan -1,000 0
-2,000
disbursements during the period. -0.1
-3,000 -0.2 -0.2
-4,000 -0.3 -0.3
This notwithstanding, the overall BOP recorded a surplus of
-5,000 -0.4
US$247mn (+0.6% GDP), compared to a deficit of US$129 mn 2014 2015 2016
(-0.3% GDP) in 2015. The improved BOP position translated CA balance ($m) CFA balance ($m)
Overall Balance (% GDP)
into external reserves accretion. Gross foreign assets
increased to US$6.2bn in 2016, equivalent to 3.5 months
import cover. This compares with US$5.9bn in 2015.
Pace of economic activity still subdued
15.0
The balance of payments outlook for 2017 remains positive
given that production levels at the TEN oil fields and the 10.0
Sankofa Fields are expected to ramp up, resulting in increased
volume of oil exports. On the downside, the expected hikes in 5.0
Fed’s rate and the possible appreciation of the US dollar
leading to tight external financing conditions and lower 0.0
portfolio inflows, which may exert downward pressures on the
-5.0
exchange rate and worsen the inflation outlook.
-10.0
Pace of economic activity subdued but prospects
positive
Economic activity remained modest throughout last year,
against the backdrop of policy tightness, oil and gas
Consumer sentiments reflect optimism about economic
production challenges at the Jubilee field, and lingering prospects
consequences of the power supply constraints. The November
110.0
2016 update of the Composite Index of Economic Activity 100.0
(CIEA) points to subdued pace of economic activity, reflecting 90.0
declines in industrial consumption of electricity, cement sales, 80.0
tourist arrivals and domestic VAT collection. 70.0
60.0
The latest consumer sentiments survey conducted after the 50.0
December 2016 polls reflected optimism about economic 40.0
prospects. This was against the back drop of favourable 30.0
economic outlook and moderating consumer prices. 20.0
10.0
Economic activity is expected to strengthen in 2017 on the
back of gradual rebound in credit extension to the private
sector and improvement in the macro fundamentals. In
addition, the expected increase in oil production from the TEN
Monetary Policy Summary /January 2017

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and the Sankofa fields are expected to boost growth further in Headline inflation declines, driven by non-food inflation
2017. However, the major risks to the growth outlook include 30.0
volatile commodity prices and high utility costs.
25.0
20.0
Inflation continues to decline
Headline inflation continued to ease in the last quarter of 2016. 15.0
From the peak of 19.2 percent in the first quarter of 2016
10.0
(17.7% in Dec. 2015), inflation broadly slowed to 15.4 per cent
5.0
in December 2016. This was supported by the monetary policy
tightening over the past years and relative stability of the
0.0
exchange rate for most of 2016 and easing underlying inflation
pressures.
Overall Food Non-food
The slowdown in inflation was influenced mainly by non-food.
Non-food inflation declined from 23.3 per cent in December Moderation in the CPI sub-indices (%)
2015 to 18.2 per cent in December 2016, supported by 2.0
stability in the domestic currency and favourable base effects
1.5
arising from the upward revision in petroleum products a year
earlier. In contrast, food inflation picked up from 8.0 per cent in
1.0
December 2015 to 9.7 per cent in December 2016, driven
largely by domestic food components. 0.5
0.0
Contributions to the overall consumer price index showed
general moderation in all the sub-indices in December 2016,
-0.5 Others Transport
with the exception of food & beverages and medical care & Housing & Utilities Food&Bev
health expenses which exerted slightly higher upward -1.0
pressures on inflation.
The Bank’s main core measure of inflation, which excludes
energy and utility prices, significantly declined to 14.6 per cent Core inflation moderating (%)
in December 2016 from 18.6 per cent in December 2015, 25.0
indicating an easing of underlying inflation pressures.
20.0
Similarly, the Bank of Ghana’s round of surveys on inflation
expectations declined significantly alongside headline inflation 15.0
during 2016. The consumer inflation expectation index
10.0
declined to 79.6 in December 2016 from 87.8 in December
2015. Also, the financial sector inflation expectations declined Headline Inflation
5.0
to 14.8 per cent from 18.0 per cent over the same comparative Core Inflation (excl. energy and
utility)
period. The improvement in inflation expectations was mainly
0.0
attributed to relative stability in the local currency, improving
electricity supply and renewed confidence in the economy
following another successful election.
Monetary Policy Summary /January 2017

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Fiscal challenges pose risks to the inflation
Budget deficit widens due to revenue shortfalls (% GDP)
outlook

Provisional fiscal data for the first eleven months of the year

show that total Revenue and Grants amounted to GH¢30.1 25
billion (18.0% of GDP) compared with a target of GH¢34.0 20
billion (20.4% of GDP); while total expenditures and arrears 15
clearance stood at GH¢41.7 billion (25% of GDP) relative to 10
the target of GH¢42.4 billion (25.4% of GDP). 5

-5
These resulted in an overall budget deficit which was
estimated at 7.0 per cent of GDP as of November 2016, higher -10 -8.1 -5.8 -7.0
-10.0
-15 -11.2
than the target of 4.7 per cent of GDP. The deficit was
Nov-12 Nov-13 Nov-14 Nov-15 Nov-16
financed mostly from domestic sources that included a
drawdown on government deposits with the Bank of Ghana.
Revenue & Grants Total Exependiture Fiscal Deficit
The fiscal slippage was mainly attributed to shortfalls in
revenues, arising from low international oil prices, weak tax Public debt expands in November 2016
revenue mobilization and lower than expected donor support. 35.0 80.0
The fiscal outturn for 2016 presents upside risks to the inflation 30.0 70.0
outlook. 60.0
25.0
50.0
20.0
Available data indicates that the total public debt stood at
40.0
US$30.1 billion (71.9% of GDP) at the end of November 2016, 15.0
30.0
compared with US$25.6 billion (69.5% of GDP) at the end of 10.0
20.0
December 2015. Of the total, Domestic debt accounted for
5.0 10.0
over 55 per cent, compared with some 40 per cent share in
0.0 0.0
2015. The rising share of domestic debt in total public debt is a
positive development for long term debt sustainability for two
main reasons.
First, it would help minimize the potential impact of
unanticipated redemptions, and secondly, lower the sensitivity
of the public debt profile to exchange rate volatility. It is Yield curve moves lower in 2016 (%)
however important to manage this process in a manner that
does not crowd out the private sector from the loanable funds
market.
Money supply growth picks up
Reserve money growth picked up on account of a higher
contribution from the Net Domestic Assets (NDA) of the Bank
of Ghana. This was as a result of higher contributions from the
OMO sterilization account and other items net.
Broad money supply (M2+) growth also picked up due to a
higher contribution from the NDA of the banking system. The
rise in M2+ growth was reflected in currency outside banks
and demand deposits.
Monetary Policy Summary /January 2017
nb$SU PDG
%
External Domestic
Debt(% of GDP) R-Axis

Nov-15 Nov-16
17.0
15.0

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Money market rates decline with a slight uptick in
private sector credit growth Private sector credit growth picks up (%)
Treasury securities broadly declined during the last year as 60
government reduced its public sector borrowing requirements 50
on the money market.

Bank credit to the private sector moderated for most part of

2016, but gradually picked up in the last two months. Total
outstanding credit stood at GH¢34,545.4 million at the end of 10
November 2016, of which the private sector accounted for 0
84.5 per cent.
-10
NGPSC RGPSC
-20
Mixed performance of key financial sector
indicators as NPLs decline
The performance of the banking sector remained relatively
strong in 2016 underpinned by asset growth and marginal
improvement in liquidity. The strong asset growth was due to Non-performing loan ratios decline
increases in banks’ investment portfolio and foreign assets. 25.0
20.0
Banks’ solvency, as measured by the Capital Adequacy Ratio
(CAR), did not record significant changes over the review
15.0
period, although asset quality generally deteriorated. However,
asset quality started improving in the last quarter of 2016 after
10.0
restructuring, reclassification and commencement of actual
payments of the energy-related State Owned Enterprises 5.0
(SOEs) debts owed banks.
0.0
The NPL ratio improved in the last quarter of 2016 from 19.0
per cent as at end September 2016 to 17.3 per cent as at end- Non Performing Loans Adjusted NPLs
December 2016 with the onset of payments of the restructured
Tema Oil Refinery (TOR) and Volta River Authority (VRA)
debts. Growth in banks’ loans and advances remained modest
Bank earnings and profitability decline
through 2016 despite a slight pick-up in the last quarter on the 35.0 6.0
back of easing stance in bank credit to both enterprises and
30.0 5.0
households.
25.0
4.0
20.0
The banking industry CAR also picked up slightly from 17.0
3.0
per cent as at end-September 2016 to 17.8 per cent as at the 15.0
end of the year. The key profitability indicators, namely, return- 2.0
10.0
on-equity (ROE) and return-on-assets (ROA) however, fell
5.0 1.0
from 20.8 per cent and 4.5 per cent as at September 2016 to
- -
18.0 per cent and 3.8 per cent respectively for the period
ending December 2016. Liquidity eased with both core and
broad liquidity indicators, pointing towards marginal Return On Equity Return On Assets (RHS)
improvement in liquidity as at end-December 2016 compared
with the end-September 2016 position.
Monetary Policy Summary /January 2017

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Relative stability in the exchange rate is foreseen
The pace of exchange rate depreciation in 2016 slower
The foreign exchange market witnessed some volatility in the
than 2015
run-up to the December polls as demand pressures mounted,
but the pace of depreciation has since slowed. In the outlook,
the tight monetary policy stance, renewed confidence in the
economy and improved balance of payments outturn are
expected to support stability in the foreign exchange market.
In 2016, the Ghana cedi recorded a cumulative depreciation of
9.6 per cent against the US dollar, compared with 15.7 per
cent in 2015. The Ghana cedi remained relatively stable
against the major currencies in December 2016, on the back
of tighter monetary policy, improved sentiments and increased
foreign exchange inflows.
The first six transaction days in 2017 showed a depreciation of
the cedi by 0.81 per cent against the U.S dollar compared to
Real effective exchange rate slightly overvalued
0.51 per cent depreciation in 2016. However, the cedi’s
volatility is slightly lower in 2017 compared to 2016. The
nominal effective exchange rate remained broadly stable,
while the real effective exchange rate reflected some
appreciation.
Global policy uncertainties weigh on domestic
economy
Although domestic growth conditions remain modest,
prospects are positive, underpinned by improved oil and gas
production from the new oil fields, the gradual rebound in
growth in private sector credit and improved sentiments and
expectations. However, upside risks to the global economy
which includes policy uncertainties such as Brexit and volatile
commodity prices, could weigh on domestic growth conditions
Inflation seen returning to the target in 2018
in 2017.
Monetary policy stance unchanged
The developments in headline inflation during the year were
broadly in line with the Bank’s 2016 forecasts. At this MPC
round, however, the BOG’s updated January 2017 forecast
sees inflation declining to the medium-term inflation target in
2018, compared to the November forecast of meeting the
target in 2017. Meeting the inflation target in 2017 would have
required a dramatic tightening of monetary policy at the
expense of economic growth, which in the Committee’s view
was not feasible.
Monetary Policy Summary /January 2017


-2
90% 60% 30% confidence interval

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The January forecast revision incorporated new information
that the BOG analysed after the November 2016 forecast
round. This comprised the recent upward adjustments in expump prices that were announced after the November
forecast, higher than expected end-year exchange rate
depreciation and a higher than budgeted fiscal deficit outturn
for 2016. This inflation outlook could however improve if the
fiscal consolidation process is restored, alongside tight
monetary policy and exchange rate stability.
Recent inflation trends are positive but risks exist
The recent downward trends in inflation are positive but there
are emerging risks in the outlook. On the upside, rising global
yields and stronger dollar as well as the anticipated hikes in
the Fed rate in 2017 with its implications on external financing
conditions for emerging and developing economies pose risks
to the inflation outlook. Also, the impact of the recent
exchange rate volatility, persistent increases in food inflation
and the higher than targeted fiscal outturn are all upside risks
for inflation going forward.
The downside risks to the inflation outlook include the
continued improvement in inflation expectations alongside
deceleration in core inflation is expected to support the
downward trends in inflation in the coming months.
In conclusion, the Committee viewed the declining trends
observed in headline inflation, core inflation and inflation
expectations as positive, and the risks to inflation and growth
as balanced. Hence, the Monetary Policy Rate was maintained
at 25.5 per cent at the January MPC meeting. The Committee
will continue to monitor developments and take the necessary
.
policy actions required for the attainment of the medium term
inflation target of 8±2 per cent.
Monetary Policy Summary /January 2017

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ANNEXES
Headline Inflation (%) Monthly Changes in CPI (%)
Combined Food Non-food Combined Food Non-food
Dec-13 13.5 7.2 18.1 1.0 0.6 1.3
Dec-14 17.0 6.8 23.9 1.0 0.7 1.1

Jan 16.4 6.9 23.0 3.4 5.7 2.2
Feb 16.5 7.0 23.0 1.2 0.5 1.6
Mar 16.6 7.2 23.1 1.0 0.8 1.2
Apr 16.8 7.2 23.2 1.8 1.5 2.0
May 16.9 7.3 23.4 1.0 1.1 0.9
Jun 17.1 7.4 23.6 1.8 1.5 2.0
Jul 17.9 7.6 24.6 2.3 -0.8 4.1
Aug 17.3 7.7 23.4 -0.7 -1.2 -0.5
Sep 17.4 7.8 23.2 -0.1 -2.9 1.4
Oct 17.4 7.8 23.0 2.7 0.1 4.1
Nov 17.6 7.9 23.2 1.0 1.0 1.1
Dec 17.7 8.0 23.3 1.1 0.8 1.2

Jan 19.0 8.2 25.5 4.6 5.8 4.0
Feb 18.5 8.3 24.5 0.8 0.6 0.8
Mar 19.2 8.3 25.7 1.7 0.7 1.2
Apr 18.7 8.4 24.8 1.4 1.5 1.3
May 18.9 8.5 25.0 1.1 1.2 1.1
Jun 18.4 8.6 24.2 1.3 1.5 1.2
Jul 16.7 8.6 21.2 0.9 -0.8 1.7
Aug 16.9 8.5 21.5 -0.6 -1.4 -0.3
Sep 17.2 9.0 21.6 0.2 -2.4 1.4
Oct 15.8 8.7 19.4 1.4 -0.2 2.2
Nov 15.5 9.3 18.7 0.8 1.6 0.5
Dec 15.4 9.7 18.2 0.9 1.2 0.8
Source: Ghana Statistical Service
Measures of Core Inflation
Weight 2016
% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Headline Inflation 100.0 19.0 18.5 19.2 18.7 18.9 18.4 16.7 16.9 17.2 15.8 15.5 15.4
Core 1: Inflation excl Energy and Utility 94.9 17.6 17.2 18.1 17.7 17.9 17.9 17.8 16.6 16.9 15.2 14.7 14.6
Core 2: Inflation excl Energy and Utility 77.3 19.1 18.7 19.7 19.2 19.3 19.3 19.2 17.8 18.4 16.5 15.4 15.1
and Volatile Food Items
Core 3: Inflation excl Energy and Utility 73.1 17.5 17.2 17.1 16.7 16.8 16.7 17.9 16.6 16.9 14.9 14.3 14.1
Volatile Food Items & Transportation
Core 4: Inflation excl All Food Items, 51.0 24.2 23.4 24.9 24.1 24.3 24.3 24.0 21.9 21.9 19.0 17.9 17.4
Energy & Utility
Monetary Policy Summary /January 2017

Pag e | 10
CPI Components
2015 2016
Weghts Mar Jun Sep Dec Mar Jun Sep Dec
(%)
Overall 100.0 16.6 17.1 17.4 17.7 19.2 18.4 17.2 15.4
Food and Beverages 43.9 7.2 7.4 7.8 8.0 8.3 8.6 9.0 9.7
Non-food 56.1 23.1 23.6 23.2 23.3 25.7 24.2 21.6 18.2
Alcoholic Beverages, Tobacco 1.7 20.1 20.1 20.8 19.2 15.3 15.1 15.7 13.5
Clothing and footwear 9.0 22.4 24.3 24.9 24.1 21.0 22.6 23.2 16.4
Housing, Water, Elect, Gas & Fuels 8.6 26.2 24.8 23.6 24.3 39.6 32.8 28.0 20.2
Furnish, H/H Equipt. Etc 4.7 20.9 23.3 23.4 25.8 22.9 21.4 23.0 18.8
Health 2.4 18.1 16.8 15.7 14.7 13.7 13.9 15.4 18.5
Transport 7.3 25.8 25.5 23.8 27.0 40.0 40.3 27.3 27.2
Communications 2.7 13.8 12.0 15.4 14.0 13.6 12.5 11.3 10.8
Recreation & Culture 2.6 23.1 23.5 27.0 26.9 26.7 27.4 27.6 20.3
Education 3.9 22.9 24.6 29.6 26.8 27.7 33.3 32.5 23.4
Hotels, Cafes & Restaurants 6.1 18.4 19.8 18.0 18.9 15.9 14.9 16.1 13.7
Miscellaneous goods & services 7.1 16.3 19.2 23.0 21.7 18.3 15.5 13.1 14.7
BILATERAL MOVEMENT OF THE CEDI AGAINST CORE CURRENCIES
Monthly Year-to-Year Changes (%)
GH¢/$ GH¢/£ GH¢/€ GH¢/$ GH¢/£ GH¢/€ GH¢/$ GH¢/£ GH¢/€

Jan-15 3.2400 4.9000 3.6700 -1.2 1.6 6.3 -25.9 -20.0 -11.4
Feb-15 3.4700 5.3600 3.9000 -6.6 -8.6 -5.9 -27.4 -21.3 -11.0
Mar-15 3.7500 5.5500 4.0600 -7.5 -3.4 -3.9 -28.5 -19.8 -10.1
Apr-15 3.8500 5.9500 4.2900 -2.6 -6.7 -5.4 -27.5 -20.5 -10.3
May-15 3.9996 6.1000 4.3600 -3.7 -2.5 -1.6 -27.7 -20.7 -9.6
Jun-15 3.4648 6.8208 4.8400 15.4 -10.6 -9.9 -13.4 -25.1 -15.5
Jul-15 3.4500 5.3818 3.5700 0.4 26.7 35.6 -12.2 -4.7 13.7
Aug-15 4.0500 6.2173 4.5400 -14.8 -13.4 -21.4 -22.7 -16.5 -9.0
Sep-15 3.7545 5.6956 4.2257 7.9 9.2 7.4 -14.8 -8.9 -3.9
Oct-15 3.7854 5.7858 4.1526 -0.8 -1.6 1.8 -15.5 -11.5 -3.0
Nov-15 3.7861 5.7009 4.0074 0.0 1.5 3.6 -15.5 -11.8 -0.4
Dec-15 3.7950 5.6265 4.1514 -0.2 1.3 -3.5 -15.7 -11.5 -6.1
Cum. Changes (%) Jan-Dec -15.7 -11.5 -6.1

Jan-16 3.8311 5.4945 4.1825 -0.9 2.4 -0.7 -1.0 2.4 -0.7
Feb-16 3.8787 5.4068 4.2525 -1.2 1.6 -1.6 -2.2 4.1 -2.4
Mar-16 3.8304 5.5252 4.3456 1.3 -2.1 -2.1 -0.9 1.8 -4.5
Apr-16 3.7951 5.5361 4.2986 0.9 -0.2 1.1 0.0 1.6 -3.4
May-16 3.8337 5.6097 4.2700 -1.0 -1.3 0.7 -1.0 0.3 -2.8
Jun-16 3.9230 5.3052 4.3623 -2.3 5.7 -2.1 -3.3 6.1 -4.8
Jul-16 3.9469 5.1673 4.3756 -0.6 2.7 -0.3 -3.9 8.9 -5.1
Aug-16 3.9445 5.1612 4.3968 0.1 0.1 -0.5 -3.8 9.0 -5.6
Sep-16 3.9709 5.1576 4.4653 -0.7 0.1 -1.5 -4.4 9.1 -7.0
Oct-16 3.9643 4.8184 4.3345 0.2 7.0 3.0 -4.3 16.8 -4.2
Nov-16 3.9805 4.9754 4.2196 -0.4 -3.2 2.7 -4.7 13.1 -1.6
Dec-16 4.2002 5.1154 4.3813 -5.2 -2.7 -3.7 -9.2 10.0 -5.2
Cum. Changes (%) Jan-Dec -9.6 10.0 -5.2
Monetary Policy Summary /January 2017

Pag e | 11
MOVEMENTS OF SELECTED CURRENCIES AGAINST THE US DOLLAR (%)
Pt-to-pt. (%) Advanced Economies Emerging Markets SSA
Euro Pound Yen Yuan Rupee Real Rand Kwacha Gh. Cedi Naira Shilling
Euro zone UK Japan China India Brazil S. Africa Zambia Ghana Nigeria Kenya

Jan -5.8 -3.2 0.9 -0.4 1.0 0.3 -0.5 -2.2 -1.2 -0.8 -1.0
Feb -2.3 1.2 -0.4 -0.5 0.2 -6.5 -0.2 -4.2 -6.8 -6.5 -0.1
Mar -4.7 -2.4 -1.4 0.2 -0.8 -10.2 -0.4 -7.8 -7.3 -1.3 -0.3
Apr 0.0 0.1 0.7 0.6 -0.3 3.3 0.8 -0.8 -2.7 0.0 -1.8
May 3.1 3.2 -1.1 0.0 -1.6 -0.8 0.1 1.9 -3.7 0.0 -3.1
Jun 0.7 0.8 -2.3 0.0 -0.1 -1.6 -2.5 -0.9 -7.6 0.0 -2.3
Jul -2.0 -0.1 0.3 0.0 0.3 -3.6 -1.4 -4.4 25.3 0.2 -2.5
Aug 1.3 0.1 0.3 -2.1 -2.4 -8.3 -3.5 -5.3 -14.6 0.0 -1.2
Sept 0.8 -1.5 2.3 -0.4 -1.6 -9.8 -5.3 7.8
Oct 0.0 0.0 0.1 0.3 1.8 0.7 1.1 -0.8
Nov -4.5 -1.0 -2.1 -0.3 -1.7 2.4 -4.7 0.0
Dec 1.5 -1.4 0.8 -1.2 -0.6 -2.5 -5.5 -0.2
Jan-Dec (Cum) -11.9 -4.2 -1.8 -4.0 -5.9 -36.6 -22.0 -23.8 -11.8 -8.4 -12.3

Jan -0.3 -4.0 3.0 -1.9 -1.2 -4.3 -8.4 -3.2 -1.0 0.3 -0.1
Feb 2.3 -0.5 3.1 0.3 -1.3 2.3 3.7 -1.1 -1.2 0.0 0.3
Mar 0.2 -0.4 1.5 0.7 2.0 7.3 2.5 2.2 1.3 0.0 0.5
Apr 1.9 0.5 3.1 0.4 0.7 3.7 5.4 16.0 0.9 0.0 0.3
May -0.3 1.5 0.6 -0.8 -0.7 0.6 -4.8 -4.3 -1.0 0.0 0.5
Jun -0.7 -2.3 3.4 -1.0 -0.6 3.5 1.8 -6.1 -2.3 -30.4 -0.4
Jul -1.6 -7.5 1.1 -1.3 0.1 4.3 4.6 7.9 -0.6 -9.6 -0.2
Aug 1.4 -0.3 2.9 0.5 0.4 2.3 4.5 -2.2 0.1 2.5 -0.1
Sept 0.1 0.3 -0.6 -0.3 0.3 -1.4 -1.8 -0.7
Oct -1.8 -6.2 -2.0 -0.9 0.0 2.1 0.7 0.2
Nov -2.1 0.8 -4.3 -1.7 -1.4 -4.6 0.1 -0.4
Dec -2.1 0.5 -6.3 -1.1 -0.2 3.9 0.6 -5.2
Jan-Aug (Cum) -2.9 -17.6 5.5 -7.0 -1.8 19.7 8.9 9.1 -10.0 -37.3 0.8
Source: Reuters and Bank of Ghana computation
Monetary Policy Summary /January 2017

Pag e | 12
Selected Economic and Financial Indicators Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
(Annual percentage change; unless otherwise indicated)
National Income and Prices
Real GDP 4.2 n.a n.a 4.2 n.a n.a 2.3 n.a n.a 4.0 na na na
Real GDP_non-oil 4.1 n.a n.a 6.7 n.a n.a 6.2 n.a n.a 4.6 na na na
Consumer price index (end of period)
Overall 17.7 19 18.5 19.2 18.7 18.9 18.4 16.7 16.9 17.2 15.8 15.5 15.4
Food 8.0 8.2 8.3 8.3 8.4 8.5 8.6 8.6 8.5 9.0 8.7 9.3 9.7
Non-food 23.3 25.5 24.5 25.7 24.8 25.0 24.2 21.2 21.5 21.6 19.4 18.7 18.2
Exchange rate ($/ȼ): (end of period) 3.7944 3.8311 3.8787 3.8304 3.7951 3.8337 3.9230 3.9469 3.9445 3.9709 3.9643 3.9805 4.2002
Exchange rate depreciation (M/M) -0.20 -0.96 -1.2 1.14 0.92 -1.00 -2.30 -0.40 0.10 -0.66 0.17 -0.41 -4.80
Exchange rate depreciation (YTD, %) -15.7 -0.96 -2.2 -0.9 -0.02 -1.03 -3.28 -3.67 -3.81 -4.44 -4.29 -4.68 -9.66
Money and credit
Broad money supply (M2+) 26.1 2 8.7 23.0 18.1 16.1 16.7 12.0 25.9 20.6 22.4 19.8 20.8 22.0
Credit to the private sector 24.7 2 4.7 19.5 11.2 11.1 10.1 8.5 16.0 12.4 12.6 12.1 13.5 14.4
Real Credit to the private sector 5.9 4 .8 0.8 -6.7 -6.1 -7.4 -8.4 -0.6 -3.8 -2.8 -3.2 -1.8 -0.8
Interest rates (%)
Monetary Policy rate 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 25.5 25.5
Interbank rate 25.3 23.5 25.4 25.4 25.4 25.5 25.5 25.5 25.5 25.5 25.5 25.5 25.3
91-Day treasury bill rate 23.1 22.7 22.7 22.6 22.8 22.8 22.8 22.8 22.8 22.9 22.8 20.9 16.4
182-Day treasury bill rate 24.4 24.5 24.5 24.6 24.6 24.6 24.6 24.7 24.7 24.7 24.3 22.6 17.6
Average lending rate 27.5 28.2 28.2 28.6 32.1 32.3 32.7 33.0 33.0 29.3 32.1 32.0 31.2
3-month average Deposit rate 13.0 13.5 13.5 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0 13.0
lending - deposit rate spread 14.5 14.7 14.7 15.6 19.1 19.3 19.7 20.0 20.0 16.3 19.1 19.0 18.2
External Sector (cummulative)
Current account balance ($million) -2,819 n.a n.a -540.4 n.a n.a -1,139.8 n.a na -1,915.9 na na -2,643.6
per cent of GDP -7.8 n.a n.a -1.3 n.a n.a -2.7 n.a na -4.5 na na -6.2
Trade balance ($million) -3,928.9 -249.2 -397.9 -675.4 -972.8 -1,274.9 -1,395.6 -1,665.5 -1,976.1 -1739.8 -2,142.9 -2,221.2 -1,689.2
Commodity prices (International)
Cocoa ($/tonne) 3,301 2 ,895 2 ,861 3,010.1 3,084.0 3,014.4 3,070.5 2,998.9 2,993.5 2,845.7 2,695.0 2,441.7 2,268.4
Gold ($/ounce) 1,069 1 ,098 1,199 1,243.0 1,242.8 1,256.2 1,275.2 1,338.3 1,339.2 1,326.7 1,274.6 1,237.6 1,151.2
Crude Oil ($/barrel) 38.9 3 1.9 33.4 39.8 46.9 47.7 49.9 46.6 47.2 47.2 51.4 47.1 54.9
Gross Foreign Assets (US$ m) 5 ,884.7 5 ,838.6 5,531.0 5,696.3 5,951.0 5,498.0 5,199.4 5,049.7 4,903.3 4,788.1 5,917.4 6,099.0 6,161.8
months of import cover 3.5 3.4 3.2 3.3 3.5 3.2 3.0 2.9 2.8 2.8 3.4 3.5 3.5
Net international reserves (US$m) 3 ,093.7 3 ,079.5 2 ,601.0 2,735.0 2,860.0 2,624.4 2,337.5 2,221.4 2,062.0 1,815.1 2,209.0 3,370.8 3,431.0
Fiscal (as at End-Period)
Net Domestic Financing (GHS Million) 3 ,814.9 9 67.7 2 ,620.9 3,394.5 4,097.2 5,365.6 5,646.9 7,898.0 10,099.1 9,812.3 9,528.9 9,963.2 12,959.1
Per cent of GDP 2.9 0.6 1 .7 2.1 2 .6 3 .4 3.56 4.74 6.06 5.88 5.71 5.97 7.77
Non-Performing Loan(NPL) 14.7 14.6 15.6 16.2 18.6 19.3 18.8 19.1 18.6 19.0 19.0 18.8 17.6
Non-Performing Loan(Excluding Loss) 6.8 6.5 7.6 8.3 10.4 11.5 10.9 11.0 10.6 10.8 10.2 9.8 8.4
Monetary Policy Summary /January 2017