© Reuters. FILE PHOTO: People walk past the Bank of Ghana in Accra, Ghana, November 28, 2018. REUTERS/Zohra Bensemra/File Photo
By Maxwell Akalaare Adombila and Christian Akorlie
ACCRA (Reuters) -Ghana’s central bank on Monday maintained its key interest rate at 29%, saying the inflation outlook had worsened slightly over the past two months and required close monitoring.
The West African cocoa, gold and oil producer has been restructuring its debts as it tries to emerge from its worst economic crisis in a generation, supported by a $3 billion International Monetary Fund (IMF) programme.
At the Bank of Ghana’s last rate-setting meeting in January it lowered its policy rate by 100 basis points, citing the need to maintain a strong stance, while noting that inflation had fallen sharply over 2023.
Inflation rose slightly in January before slowing again in February, and central bank governor Ernest Addison told a news conference that the latest inflation forecasts showed a more elevated profile than in January.
“Overall risks to inflation are slightly on the upside and will require close monitoring. Given these considerations, the committee decided to maintain the monetary policy rate at 29%,” he said.
Addison said he was expecting the IMF to visit Ghana for a second review of its Extended Credit Facility-backed programme in April.
If the visit is a success, the IMF’s executive board could meet to discuss the second review in May and potentially approve another loan disbursement, he added.
“Fiscal policy implementation so far has been broadly consistent with targets under the IMF ECF-supported programme,” Addison said.
Ghana reached a deal in January to restructure $5.4 billion of loans with its official creditors. It is now pushing for a deal with holders of about $13 billion in international bonds.
