Ghana May Hold Key Rate as Inflation Climbs to Three-Year High

Ghana’s central bank will probably leave its benchmark interest rate unchanged for a fourth time as a weakening currency pushes inflation to a three-year high.

The Bank of Ghana will keep the policy rate at 15 percent, according to five of six economists surveyed by Bloomberg. Razia Khan, London-based head of African economic research with Standard Chartered Plc, expects a 100 basis-point increase. The decision will be announced at 11 a.m. tomorrow in the capital, Accra.

The cedi has depreciated 4.4 percent this year against the dollar as companies increase their demand for foreign exchange to pay import bills and repatriate profits, central bank Governor Kofi Wampah said in an interview last week.

The inflation rate climbed to 10.6 percent in April, the highest level in almost three years, after the cedi had its worst monthly decline since June. The currency closed unchanged at 1.9915 per dollar yesterday in Accra.

The central bank will probably keep rates unchanged to tackle inflation and help shore up the weakening currency, Angus Downie, head of economic research at Ecobank Transnational Inc. (ETI) in London, said in an e-mailed response to questions.

“Our expectation is also based on the need to maintain high fixed-income yields that help attract capital inflows, particularly in the wake of weaker oil and gold prices,” he said.

Ghana is the world’s second-largest cocoa producer and the continent’s No. 2 gold miner. Spot prices for the metal fell 17 percent this year, while West Texas Intermediate crude retreated to a 2013 low of $86.97 a barrel on April 17 before rising to $96.89 at 12:47 p.m. today in Singapore. Ghana began exports of crude in December 2010.

Borrowing costs on benchmark 91-day Treasury bills were little changed at an auction on May 17 at 22.97 percent, the second-highest in Africa after Malawi among debt of that duration tracked by Bloomberg. Yields on $750 million dollar bonds due October 2017 rose 3 basis points to 4.97 percent yesterday.

To contact the reporters on this story: Pauline Bax in Accra at; Moses Mozart Dzawu in Accra at

To contact the editor responsible for this story: Nasreen Seria at

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