Ghana’s central bank on Monday announced a tightening of its monetary policy stance with a record hike in the policy rate to slow down inflation.
At a press briefing, Bank of Ghana Governor Ernest Addison announced an increase in the benchmark policy rate by 250 basis points to 17 percent to tame ballooning commodity prices on the local market and curb the rising inflation.
He said the policy rate hike, the highest over the past 20 years, would arrest the rising inflation rate, which surged to 15.7 percent in February.
The governor attributed the elevated inflationary risk to the rising cost of food and petroleum products, part of which he blamed on the Russia-Ukraine crisis.
“The uncertainty surrounding price developments and its impact on economic activity is weighing down business and consumer confidence,” Addison said.
The bank’s latest forecast, he said, showed that inflation would fall back into the medium-term target band within a year.
Addison expressed confidence that the increase in the policy rate would go a long way to make investments in local currency assets attractive, thereby strengthening the Ghana cedi against major foreign currencies and helping curb inflation. Enditem