ACCRA: Ghana’s central bank on Monday held its main interest rate at 30.00% as forecast by a Reuters poll of analysts, citing lower inflation, a stabilised exchange rate and relatively strong economic growth.
The West African cocoa, gold and oil producer has been grappling with its worst economic crisis in a generation, characterised by double-digit inflation and ballooning public debt.
The capital Accra has been hit by several days of anti-government protests driven by anger over economic hardship.
The government has secured a $3 billion support package from the International Monetary Fund conditional on debt restructuring.
“The policy mix under the three-year IMF extended credit facility is beginning to yield results. Economic activity is rebounding strongly. The exchange rate is stabilising. Inflation is declining, and the level of foreign exchange reserves has improved,” Bank of Ghana Governor Ernest Addison said.
“Sustained improvement in these indicators should result in the restoration of real incomes and purchasing power,” he told a news conference, adding that the central bank expected continued disinflation but was ready to step in should that not happen.
In August, Ghana’s inflation slowed to 40.1% on a year-on-year basis from 43.1% in the previous month, but it remained well above the central bank’s 6%-10% target band.
A majority of analysts polled by Reuters said the Bank of Ghana would keep interest rates steady on Monday after 1,650 basis points of hikes over the last two years.
In its previous decision in July, the bank raised the main interest rate by 50 basis points to prevent a disinflation trend from being blown off course.