The Bank of Ghana on Monday unpredictably left its standard interest rate constant on signs that pervasive inflation may be leveling and concern the outlook for economic growth is deteriorating. The monetary policy committee maintained the policy rate at 19%. After cumulative rate hikes of 550 basis points since November,t only three economists in a Bloomberg survey forecast the unchanged stance.
Annual consumer inflation is near a 19-year high and almost triple the ceiling of the 6% to 10% target band the bank of Ghana increased at a slower pace in June and month-on-month price growth has decelerated in the past two months. The Governor, Ernest Addison talked about how the rate of inflation had gone up and it was important to peak since high-frequency data shows the economy is deteriorating.
The S&P Global Ghana Purchasing Managers’ Index has been below 50, indicating a deterioration in business conditions. The economy’s conditions have fueled protests and led the government to acquiesce to public servants’ demands for a cost-of-living allowance to avert strikes from spreading. It also prompted the nation to seek an economic program from the International Monetary Fund.
Bank of Ghana Yields at 21.86%
The Bank of Ghana announced to yield a record of 21.86% having it being the cedi-Africa’s worst-performing currency this year, according to data compiled by Bloomberg. The cedi has depreciated 25% this year against the dollar and its sovereign debt is trading at distressed levels. Finance Ministry, Ken Ofori-Atta is expected to cut the ministry’s growth forecast when he presents his mid-term budget review later on Monday and unwell measures to stabilize the nation’s public finances and secure an IMF deal.