Ghana’s central bank has maintained its main interest rate at 29 percent for the third consecutive meeting, emphasizing the need for a strong monetary stance amid ongoing inflation uncertainties. This decision, announced on Friday, defied economists’ predictions of a 50-basis-point cut.
“Although inflation is expected to stay within the target range for the year, risks have slightly increased,” Bank of Ghana Governor Ernest Addison stated at a news conference. “This requires maintaining robust monetary policy supported by strong fiscal consolidation efforts.”
Addison cited recent exchange rate pressures, an upward adjustment in utility tariffs, and rising export fuel prices as factors contributing to inflation uncertainty. Ghana’s consumer inflation slowed to 22.8 percent year-on-year in June, down from 23.1 percent in May, but remains significantly above the central bank’s target of 8 percent, with a margin of error of 2 percentage points.
Finance Minister Mohammed Amin Adam expressed optimism earlier in the week, aiming for an inflation target of 15 percent by the end of 2024, with the economy rebounding faster than expected.
“The central bank is responding to the stalling disinflation in the first half of 2024, which has jeopardized both its short- and medium-term inflation targets,” Leslie Dwight Mensah, an economist and research fellow at the Institute for Fiscal Studies in Accra, told Reuters. He added that the decision
