Business
Bank of Ghana raises interest rates in bid to stabilze the Cedi
Plans by the country’s utility companies to raise tariffs have raised fears inflation would continue to rise.
Wampah said the Bank of Ghana was determined to keep the cedi stable in order to arrest inflation. “The monetary policy committee is determined to prevent first round effects of the likely increases in prices and the higher cedi liquidity during the fourth quarter from being entrenched into elevated inflation expectations,” he added.
The volatility in the exchange rate has continued and on monthly basis, the Ghana cedi appreciated against the US dollar. In July the cedi was weaker by 25.5 percent, and depreciated, in August, by 14.8 percent.
The Bank of Ghana has given assurance that in the coming months, the currency volatility is expected to moderate due to its tight monetary policy stance, anticipated inflows from the Eurobond issue and the syndicated pre-export finance facility for cocoa.
According to the Bank of Ghana, business sentiment has softened while consumer confidence, although up, remained subdued, the bank is optimistic growth would rebound in the medium term with anticipation in increased production of oil and gas.
The bank’s fiscal consolidation continued in the first 7 months of 2015 as revenues exceeded target while expenditures remained within targets. The central bank, however, expressed concern about the adverse effects of high volatility in financial markets, uncertainty over the timing and impact of expected tightening in the United States’ monetary policy and declining commodity prices on the balance of payments.
Meanwhile, the government is set to start a roadshow for a US$1.5 billion Eurobond on September 22.
(1 US dollar converts to 4.03 Cedis)
Source: The Africa Report
