The key issues considered have been highlighted as follows:

Among these is the recovery in export commodities driven by market dynamics, policy uncertainties and rising global trade. Crude oil prices have picked up reflecting adverse effects of the recent hurricanes in the Americas, reinforcing production cuts by OPEC. The price of gold has picked up on the back of a weak US dollar. Cocoa prices have, however, remained depressed from excess supply due to favourable weather patterns across the West African sub-region, even as demand continues to remain weak.

Further strengthening of the US dollar following the recent FED’s announcement of monetary policy normalization could tighten external financing conditions. However, the strengthened commodity prices should provide some relief as Ghana’s external position continues to strengthen.

On the domestic front, economic activity continued to pick up.

The Composite Index of Economic Activity (CIEA), which tracks short term dynamics in economic activity, indicated a growth of 3.2 percent in the year to July 2017, below the 3.9 percent growth in the same period last year.

Broad money supply (M2+), representing total liquidity in the economy increased, driven largely by strong growth in the net foreign assets of Bank of Ghana. Comparatively, broad money supply recorded an annual growth of 28.7 percent in July 2017 against 25.9 percent a year ago.

There are initial signs of a gradual pick up in private sector credit conditions. The latest credit conditions survey conducted in August 2017 showed easing of credit stance on loans to enterprises and households, alongside increased demand for credit by enterprises. The ease in credit conditions is broadly in line with the observed gradual decline in average lending rates over the period.

There was however, a blip in the three consecutive months of declining inflation as consumer price inflation rose from 11.9 percent in July to 12.3 percent in August driven by both food and non-food prices. Similarly, the Bank’s measure of core inflation, which excludes energy and utility price changes, went up from 12.6 percent in July to 13.1 percent in August.

Despite increases in headline and core inflation, the Bank’s most recent survey which was conducted in August indicated further decline in inflation expectations across the various sectors, namely, consumers, businesses and the financial sector. The Bank’s September forecast showed that although inflation moved away from the central path on the back of new data, it will trend towards the medium-term target of 8±2 percent in early 2018, barring any unanticipated shocks.

The monetary policy stance has eased in line with declining inflation and underlying inflation pressures since the beginning of the year. At this MPC round however, the Committee decided it was time to pause the easing cycle in view of emerging risks to the inflation outlook, while remaining vigilant and committed to respond and take the necessary policy actions should these initial signs of underlying pressures persist.