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Ghana’s inflation has experienced a dramatic turnaround, from 38,1 percent in September 2023 to a 14-month low of 35,2 percent in October.
What the Bank of Ghana said:
“There is a need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium-term target,” the Bank of Ghana said in a monetary policy statement.
“The committee noted that though inflation is decelerating, it remains high relative to target. Therefore there is a need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium-term target. Given these considerations, the committee decided to maintain the monetary policy rate at 30 percent”
The last 2 years for Ghana have been tumultuous. Regarded as one of its worst economic periods in over 2 decades, Ghanaians, since 2022 have been subjected to varying levels of financial stress as a result of the country’s economic shortcomings.
Earlier in the month, the country was reportedly exploring a US$400 million loan from cocoa traders to fund its industry operations as the government is facing difficulties in securing an annual loan from international banks due to ongoing government debt restructuring.
But Ghana has received the first tranche of an International Monetary Fund US$3 billion lending programme and expects to get another after a meeting of the Fund’s executive board before the end of the year. The African Development Bank Group has also granted US$102,59 million in budget support to the Ghanaian government for its Fiscal Consolidation and Economic Recovery Program. – Business Insider Africa
In addition to the policy rate decision, Ghana’s Central Bank Governor, Ernest Addison announced additional policy measures to tackle excess structural liquidity conditions in the market and enhance the disinflation process.
These measures involve consolidating the currency holding for the Cash Reserve Ratio (CRR) requirement on both foreign currency-denominated deposits and domestic currency deposits for banks.
The unified CRR for total deposits will now be held in cedis, and this is set to reset to 15 percent effective from November 30, 2023. Business Insider Africa
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