Ghana Central Bank Keeps Key Interest Rate Unchanged at 26%

  • Latest survey shows inflation expectations have moderated
  • Central bank ready to act in line with price stability mandate

Ghana’s central bank left its benchmark interest rate unchanged after raising it three times last year to curb soaring inflation.

The Bank of Ghana kept the policy rate at 26 percent, Governor Kofi Wampah told reporters in the capital, Accra, on Monday. That was in line with the forecasts of seven of the 10 analysts surveyed by Bloomberg. Two predicted an increase of 100 basis points and one said the rate would be cut.

“The slower pace of inflation reflects the tight monetary policy stance and the ongoing fiscal consolidation,” Wampah said. “The committee therefore concluded that the current tight monetary policy stance, supported by continued fiscal consolidation and improvement in the energy situation, would provide the necessary impetus to rein in inflation pressures.”

Inflation in the West African nation has stayed above 17 percent since June, fueled by the currency’s 26 percent slump against the dollar in the first half of last year. The International Monetary Fund, which approved almost $1 billion of emergency loans to Ghana in 2015, said last week policy makers will need to act more aggressively if inflation doesn’t ease.

The cedi dropped 3.4 percent to 3.9531 per dollar at 11:40 a.m. in Accra. The currency has declined 6.9 percent this year, making it the second-worst performer against the dollar in Africa.

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