Business
Bank of Ghana maintains interest rate unchanged at 18%
Ghana’s central bank kept its benchmark interest rate unchanged to help support growth in the West African economy after tightening monetary policy at an emergency meeting 2 months ago.
The Monetary Policy Committee left the rate at 18 percent, Bank of Ghana Governor Kofi Wampah told reporters in the capital, Accra today. That was in line with the forecasts of 5 out of 9 economists surveyed by Bloomberg. The rest had predicted an increase of between 1 and 2 percentage points.
Ghana is working to curb inflation that has surged to a 4-year high, fueled by a currency that lost a fifth of its value against the dollar last year. Policy makers raised the key rate by 200 basis points on February 6, a day after introducing currency controls.
“The risk to inflation remains high,” Wampah said. “However, the committee is of the view that the impulses of the recent monetary policy hike are still working through the system.”
Growth in West Africa’s second-biggest economy after Nigeria is expected to slow to 4.8 percent this year from 5.5 percent in 2013.
Policy makers raised the limit of reserves that commercial lenders must hold with the central bank to 11 percent from 9 percent, Wampah said.
Inflation quickened to 14 percent in February, fueled by a government decision last year to scrap subsidies on gasoline and diesel. An increase in water and electricity tariffs pushed consumer prices up further.
