Ghana’s Central Bank Reduces Its Key Interest Rate After Inflations Slows
Ghana’s central bank cut its benchmark interest rate for the first time in 10 months after inflation slowed in both March and April.
The key lending rate was lowered to 13 percent from 13.5 percent, Bank of Ghana Governor Kwesi Amissah-Arthur told reporters today in the capital, Accra. Only one of seven analysts surveyed by Bloomberg had forecast the reduction.
“Threats to inflation are dwindling due to the favorable food harvest and weak second-round effect of oil price increases at the beginning of the year,” Amissah-Arthur said.
Inflation slowed to 9 percent in April from 9.1 percent the month before as the effects of a 30 percent increase in gasoline prices in January eased and the cedi stabilized. The currency, which weakened as much as 5.7 percent in the first five weeks of 2011, is now down 1.4 percent in the year and food-price inflation eased to 4.2 percent in April from 4.7 percent a month earlier.
“The magnitude of the move speaks much,” Razia Khan, head of Africa economic research at Standard Chartered Plc in London, said in an e-mailed comment. “It appears somewhat tentative, as though the Bank of Ghana is testing the water, waiting to see how inflationary pressures develop.”
The central bank lowered its benchmark interest rate four times between November 2009 and July last year as inflation slowed from a five-year high of 20.7 percent in June 2009.
Inflation is expected to remain about 9 percent for the rest of the year, Amissah-Arthur said.
To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net.
Rate this Page