Ghana cuts benchmark rate by 100 basis points as inflation eases


Ghana Cedis

ACCRA – GHANA monetary authorities have announced a 100 basis-point cut in the benchmark policy rate to 29 percent down from 30 percent as the inflation eases.

The decision by the Monetary Policy Committee of the Bank of Ghana, the central bank, was made due to subdued inflationary pressures and the need to induce economic growth, said Ernest Addison, governor of the Bank of Ghana, at a news conference Monday.

“Headline inflation declined sharply by more than 30 percentage points in 2023. Several factors have supported the disinflation process, including the tightening monetary policy stance throughout 2023,” Addison told the news conference.

He said favorable international crude oil prices, which led to stable ex-pump prices and transportation costs, and relative stability in the exchange rate, also contributed to the fall in inflation.

“The latest forecast suggests that the disinflation process will continue, and headline inflation is expected to ease to around 13 percent and 17 percent by the end of 2024 before gradually trending back to within the medium-term target range of 6.0 percent and 10 percent by 2025,” the governor added.

In that case, the governor called for strict implementation of the 2024 budget and a tight monetary policy stance to sustain the disinflation process.

The West African exporter of cocoa, gold, and crude oil has been implementing an economic reform program, with support from the International Monetary Fund, to revitalize its economy which has been in crisis since 2021.

– Xinhua News

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