The Mandate of the MPC
The mandate for the Monetary Policy Committee (MPC) is derived from the Bank of Ghana Law (Act 612), section 27, passed in 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 are 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 Director of the Bank's Research Department, The Director of Banking Services of the Bank of Ghana and two external members appointed directly by the Minister of Finance.The external directors may either be from academia or from private practise. The appointment of external members is designed to complement the expertise within the Bank of Ghana.
The current members are:
- Dr. Henry Wampah, 1st Deputy Governor
- Mr. Millison Narh, 2nd Deputy Governor
- Mrs. Elly Ohene Adu, Director of Banking Services
- Mrs. Grace Akrofi, Director of Research
- Dr. John Kwakye, External Member
- Dr. Nii Kwaku Sowah, External Member
The 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. Meetings are usually held on the third Wednesday of the month in which the meeting falls. Each bi-monthly meeting runs for three days – normally from Wednesday to Friday.
The 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. A band is set around the central target of +/- 2 percent. After debating on the issues exhaustively and weighing the balance of risks in inflation and output, each committee member makes a case for moving the key policy rate in a preferred direction, citing their economic reasoning. The majority vote represents the decision of the committee.
Public Accountability and Transparency Aspects
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, the committee members and the bank has had on many occasions speak to audiences, academia and the public at large, explaining the MPC's policy decisions.