As expected, Ghana’s central bank kept its benchmark interest rate unchanged at 17 percent. Governor Ernest Addison told reporters in Accra that the decision to hold rates steady for the second year, would help cushion any spillover effect from fuel price increases and a potential trade war between United States and China.
Addison said the most recent forecast showed the rate of disinflation slowing marginally as a result of increase in petroleum prices, exchange rate depreciation and tax increases.
Although Ghana is a major commodity exporter, its Cedi currency has been unstable since May 2018. Addison noted that “given these considerations and weighing the balance of risks, the committee decided to keep the policy rate unchanged, but will continue to monitor closely developments in the coming months and take the appropriate actions to address any potential threats to inflation outlook”.
Representing 66 percent of the Gross Domestic Product (GDP), Ghana’s public debt rose to $33.9 billion. The net reserves stood at $3.8 billion, down from $4.1 billion in June 2018.
Majority of economists and analysts polled for Ghana, Kenya, Nigeria and South Africa revealed their central bank will hold rates at 17 percent, 9 percent, 14 percent and 6.50 percent respectively at their meetings.