The Monetary Policy Committee (MPC) of the Bank of Ghana has cut the country’s benchmark interest rate by 100 basis points, from 30 per cent to 29 per cent.
This is the first rate cut in the West African country since 2021 and marks the first occurrence of a rate cut by an African Central Bank this year. It also ends the pause on the benchmark rate movement since September 2023.
The rate cut comes after Ghana’s inflation softened to 23.2 per cent in December 2023 from 26.2 per cent in November 2023, the lowest value since April 2022.
Ernest Addison, the Governor of the Bank of Ghana, told the media that the latest forecast suggests that the disinflation process will continue and headline inflation is expected to ease to around 13 per cent to 17 per cent by the end of 2024, before gradually trending back to within the medium-term target range of 6 per cent to 10 per cent by 2025.
“These forecasts notwithstanding, there are upside risks to the inflation outlook and there is the need for strict implementation of the 2024 budget and a tight monetary policy stance to sustain the disinflation process.
“The committee noted the emerging recovery but sees the need to maintain a strong policy stance to consolidate the disinflation gains,” he added.
