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Goldman, Absa See More Ghana Rate Hikes If Cedi Weakens Further

  • Currency is down 17% this year, the worst performer in Africa
  • Absa says MPC may raise rates by 100 bps in third quarter
Crowds of customers make their way through a food market in Accra, Ghana.

Crowds of customers make their way through a food market in Accra, Ghana.

Photographer: Nipah Denis/Bloomberg

Ghana’s central bank will need to raise interest rates further this year unless a decline in the cedi is arrested, Goldman Sachs Group Inc. and Absa Group Ltd. said.

The West African nation increased borrowing costs by the biggest margin in two decades on Monday to arrest inflation that accelerated at the fastest pace in almost six years in February and stem a depreciation in the cedi. The currency has weakened more than 17% against the dollar this year, making it the worst performer on the continent.