INCREASE IN MONITORY POLICY RATE TO WORSEN, WARNS JCTR
Written by newsroom on December 17, 2021
The cost of living for a family of five as measured by the Jesuit Centre for Theological Reflection Basic Needs and Nutrition Basket for November 2021 stood at K8, 145.28 indicating a K123.44 decrease from K8, 268.72 in October 2021 attributed to the downward movement of reduced prices of food items.
In interrogating the November basket, JCTR has noted a steady decline in the cost of living as seasonality continues to affect the price movements in selected items on the basket while other key contributing factors to the reduced cost of living include a slight decrease in the inflation rate.
The Centre notes that a key highlight in November was the adjustment of the Monetary Policy Rate by 50 basis points to nine percent ushering in a contractionary monetary policy rate, adding that the intervention will lead to an increase in bank interest rates, contraction of money supply in the economy and in the process bring down inflation.
JCTR has since emphasised the need to guard against increases in macroeconomic variables such as inflation as it erodes the disposable incomes of households in the long run thereby compromising living standards; further reiterating that the increase of the MPR to 9 percent has the potential to increase poverty levels in the country and worsen living conditions.
JCTR has since implored government to promulgate pro-poor policies, especially those which will reduce the cost of living, promote the common good and preserve human dignity.
By Monica Aba Baidoo