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Ghana has raised its main interest rate by 200 basis points to 19% to control inflationary pressures. The Central Bank said that the increase in interest rate is imminent to ensure macroeconomic stability
Ghana has raised its main interest rate by 200 basis points to 19% to control inflationary pressures. The Central Bank said that the increase in interest rate is imminent to ensure macroeconomic stability.
Ernest Addison, governor of the central bank, while explaining the rationale for the hike in interest rate said that inflation has been creeping unabated and the present move was to buttress the increase through monetary interventions. The increased interest rate was very much in the cards and many fiscal analysts have predicted that.
It may be recalled that In March, the Bank of Ghana raised its policy rate by 250 basis points to17%, the highest hike in its history. Coupled with that, the total increase in the interest rates in the last two months worked out to 4.5 percent. That had taken the inflation to an 18-year high of 23.6%. Inflation had its distortionary effect on the economy, leading to a slackening of demand even for essential goods.
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https://trendsnafrica.com/eu-financing-for-ghana/
There are certain positive changes on the economic horizon. The rapid depreciation of Ghana’s cedi has slowed down. But the currency has still lost over a quarter of its value since the year began. Capital outflows have dried out a US $1.3 billion trade surplus gained from a 61% jump in crude oil export revenues in the first quarter. The overall balance of payments deficit was US$934.5 million in the first quarter compared to US$429.9 million in the same period last year.
