By Enyichukwu Enemanna
Ghana’s central bank on Monday announced an increase in its prime interest rate GHCBIR=ECI by 100 basis points to 28%.
This comes as the government is expected to finalize a deal with the International Monetary Fund (IMF) by the end of the first quarter, which should help stabilize the cedi and tackle the galloping inflation.
Ghana late last year secured a staff-level agreement with the IMF for a $3billion support programme, with a condition to restructure its debts to get executive board approval.
The country is facing an economic crisis that saw consumer inflation rise to 54.1% last month. The cedi currency has depreciated around 50% against the dollar in the past year, and interest payments on government debt have swelled to between 70% and 100% of GDP.
The monetary policy committee lifted borrowing costs by 100 basis points to 28% to “help drive inflation on a downward path,” Governor Ernest Addison told reporters in Accra, the capital, on Monday.
That was less than the median estimate of seven economists in a Bloomberg survey for a 200 basis-point hike.
