The Monetary Policy Committee (MPC) of the Bank of Ghana begins its first meeting for the year to review developments in the economy in the past months later today, Monday, February 15.

The last meeting held in November last year saw the prime rate reduced by 50 basis points to 18 percent.     

Monday’s meeting comes after a consistent decline over the past four to seven months in the key economic indices considered by the committee in its decisions.

These include Government’s borrowing rate and the value of the cedi which has fairly stabilized against the major trading currencies in the respective period.

Also is the Inflation Rate which saw its consecutive decline since July last year dovetail into this year as January 2010 recorded a rate of 14.78% compared to the 15.97% in December 2009.

This has further heightened the high expectations for a reduction in Interest Rates by stakeholders.

Ahead of Monday’s meeting, the Centre for Policy Analysis (CEPA) is projecting a reduction of the prime-rate by a hundred basis points.

The Executive Director of CEPA, Dr. Joseph Abbey said “based on what our analysis about the rate of inflation I will expect the Prime rate could come down on minimum of full percentage from 18 to 17% or it could even be bigger”.

Standard Bank PLC, the parent company of Stanbic Bank has already stated that it expects the Prime rate to be cut by 200 basis points and thereby be pegged at around 16 percent in the next announcement.

Standard Chartered PLC also said it expects a reduction of 100 basis points making reference to it’s projection for the entire year.

Razia Khan, the Bank’s Africa Head of Research said “we expect easing a 400 basis point over the cause of this year, starting with an aggressive 100 basis point captured at the first meeting”.

“We think the inflation out look justified it and the Bank of Ghana would be looking to front load rather than the monitoring easing”, she noted.