Despite two consecutive months of slowing inflation, Ghana’s central bank startled observers on Monday by raising its main interest rate to 29.5 percent in a statement indicating that the monetary committee still doesn’t perceive the country’s economic condition stabilizing.
One of West Africa’s greatest economies and a producer of cocoa, gold, and oil is in the midst of its worst economic crisis in a generation. To avoid default and obtain a $3 billion loan from the International Monetary Fund, the country is restructuring its debt.
To rein in spiraling price increases that reached a more than two-decade high of 54.1 percent in December, the central bank raised its primary lending rate by 12.5 percent points in the last year, from 17 percent in March 2022.
“It is crucial that monetary policy stance is calibrated tougher to re-anchor inflation expectations toward the medium objective,” Bank of Ghana Governor Ernest Addison said at a news conference. “This will put the economy firmly on the road of stability and reinforce the basis for disinflation.”