Ghana May Hold Key Rate as Inflation Reaches 3-Year High

Ghana’s central bank will probably leave its benchmark interest rate unchanged for a fourth meeting as a weaker currency pushed 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 1 percentage-point increase. The decision will be announced tomorrow at a press conference that begins at 11 a.m. in the capital, Accra.

The cedi’s 4.4 percent depreciation against the dollar this year is mainly due to companies increasing their demand for foreign exchange to pay import bills and repatriate profits, central bank Governor Kofi Wampah said in an interview last week. Inflation accelerated to 10.6 percent in April from 10.4 percent in the previous month.

Keeping rates unchanged may help to shore up the currency by maintaining “high fixed-income yields that help attract capital inflows, particularly in the wake of weaker oil and gold prices,” Angus Downie, head of economic research at Ecobank Transnational Inc. in London, said in an e-mailed response to questions.

The cedi was unchanged at 1.9915 per dollar by 10:30 a.m today in Accra.

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. Ghana also 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 fell 4 basis points to 4.93 percent today.

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