The Monetary Policy Committee of the Bank of Ghana raised its policy rate from 27% to 28% as part of the central bank’s efforts to combat the present inflationary pressures according to a Graphic Business report.
At 54.1%, inflation in December 2022 reached a 22-year high.
The policy rate, which indicates the rate at which the Central Bank will lend to commercial banks, is of great relevance to businesses.
It affects the typical lending rates for loans to people and enterprises.
“In Ghana, despite the central bank delivering 1,350 basis points of interest rate hikes, inflation has continued to rise,” Capital Economics’ Virág Fórizs told Reuters.
In contrast to other economies and central bank choices overseas, where the trend is to limit the pace of tightening, Pieter du Preez, senior economist at Oxford Economics, claimed that developments in the Ghanaian economy are unique at this moment and cannot be directly compared.
“The cedi appreciating in December will aid in driving inflation lower, but we only forecast this to happen from February or March onwards,” du Preez said.
Ghana’s cedi was the world’s worst-performing currency last year.
