Ghana maintains 30% interest rates amid declining inflation

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Ghana turns to cocoa traders for $400 million amid delays in foreign bank loans
Ghana turns to cocoa traders for $400 million amid delays in foreign bank loans

The Bank of Ghana is poised to conclude its series of interest rate hikes on September 25th, driven by a reduction in inflation within the nation’s economy.

A recent Reuters Poll involving 12 analysts revealed that the majority, consisting of 10 analysts, anticipate that the Bank of Ghana will maintain its current interest rates during the upcoming meeting.

Analysts differ on interest rates

However, one analyst proposed an additional 150 basis points hike, while another suggested a 200 basis points rate reduction.

Over the past two years, the central bank of Ghana has implemented interest rate hikes totaling 1,650 basis points as part of its efforts to combat high inflation.

In August, Ghana’s headline inflation rate decreased to 40.1%, marking a 10-month low and alleviating pressure on the central bank to continue raising borrowing costs.

According to Samuel Kobina Annim, the Government Statistician, the annual inflation rate dropped from 43.1% in July to 40.1%, primarily due to a decline in food prices.

Food inflation decreased from 55% in July to 51.9%, while non-food price growth was 30.9% compared to 33.8%. Additionally, prices experienced a 0.2% month-on-month decline.

Mike Kruiniger, a senior country risk analyst at BMI, noted, “Ghana’s disinflation process returned in August, with price growth moderating.

This will allow the Bank of Ghana to conclude its monetary tightening cycle at the September meeting,” according to Reuters