(Bloomberg) — The Bank of Ghana left its benchmark interest rate unchanged, citing modest upside risks to inflation.
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The monetary policy committee kept the rate at 29%, matching the median estimate of nine economists in a Bloomberg survey. The central bank in January lowered rates by 100 basis points, ending a prolonged policy tightening cycle that commenced in 2021 and lifted the benchmark from 13.5% to a 30% peak.
The inflation rate edged slightly lower in February to 23.2%. It has been impacted by a slide in the value of the cedi against the dollar.
Still, Governor Ernest Addison told reporters at a press briefing in Accra on Monday that “overall, risks to inflation are slightly on the upside and will require close monitoring.”
Cedi Support
He said that currency inflows from the World Bank, the country’s tight monetary stance and the outlook for lower rates in advanced economies including the US, should support the cedi going forward.
“We should expect relative stability to continue,” he said.
The currency has depreciated around 9% this year against the dollar as debt restructuring delays and concerns that an anti-LGBTQ bill — which could jeopardize Ghana’s access to vital international funding if it becomes law — weigh on sentiment.
The world’s second-biggest cocoa producer is seeking to restructure its liabilities as part of a $3 billion International Monetary Fund program it secured last year to help it return to debt sustainability.
It has completed a domestic bond workout and reached a deal in principle with bilateral lenders in January to rework $5.4 billion of loans. It is still negotiating with eurobond holders who are owed $13 billion.
(Updates with more details from fifth paragraph.)
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