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Ghana’s central bank held its main interest rate steady at 29 percent for the third meeting in a row on Friday, saying a strong monetary stance was needed due to uncertainty over the inflation outlook.
Economists polled by Reuters before Friday’s announcement predicted a 50-basis-point cut in its main rate. They expect Ghana to finish the year with interest rates 200 basis points lower.
“Even though inflation is expected to remain within the target year band, the risks have tilted slightly on the upside,” Bank of Ghana Governor Ernest Addison told a news conference.
“This will require maintaining a strong monetary policy stance, supported by strong fiscal consolidation efforts,” he said.
Ghana’s consumer inflation slowed last month to 22,8 percent year on year in June from 23,1 percent in May, but it remains well above the central bank’s 8 percent target with a margin of error of 2 percentage points either side.
Finance minister Mohammed Amin Adam said on Tuesday the West African nation would be able to reach a target of 15% by the end of the year, adding that its economy was rebounding faster than expected. The West African cocoa, gold and oil producer has been restructuring its US$30 billion debt in an attempt to emerge from its worst economic crisis in a generation. – Reuters.
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