Ghana Interest Rate

The Bank of Ghana kept its benchmark monetary policy rate steady at 27% on November 29th, 2024, amid concerns over the inflation trajectory. Policymakers highlighted that recent price trends indicate a sluggish pace of disinflation, largely due to elevated and volatile food prices. The annual inflation accelerated for the second consecutive month in October, reaching 22.1% and jeopardizing the year-end target of 18%. Despite inflationary pressures, the central bank noted that domestic macroeconomic conditions remain broadly stable, with economic activity indicators pointing to stronger growth in the second half of the year. Additionally, the ongoing implementation of the IMF-ECF Programme is progressing as planned, providing further support for economic stability.

The Bank of Ghana slashed its benchmark monetary policy rate by 200 points to 27% during a regular meeting on September 27, 2024. This marks the first reduction in eight months and the steepest since March 2018, following a slowdown in inflation and expectations for the disinflation process to continue. Ghana's annual consumer inflation eased for the 5th straight month in August 2024, falling to a near 2-1/2-year low of 20.4% from 20.9% in July, though still well above the central bank's medium-term target band of 6% to 10%. Inflation is expected to continue to ease toward the central bank’s year-end goal of 13% to 17% and steadily move toward the medium-term target by the end of 2025. Regarding economic growth, Governor Addison noted that the “economy is performing well” and that macroeconomic conditions have significantly improved, creating space for a substantial rate cut.

The Bank of Ghana left its benchmark monetary policy rate steady for a third consecutive meeting at 29% on July 26th, 2024, citing concerns about inflationary pressures due to strains on the currency. Governor Ernest Addison said that the recent developments have resulted in a slightly elevated inflation profile for the year and led to risks being tilted slightly to the upside. Ghana's inflation slowed slightly to 22.8% in June from 23.1% in May, but it remains well above the central bank's target band of 6% to 10%. The cedi has lost more than 5% of its value against the dollar since the MPC kept borrowing costs unchanged at its May meeting, driven by increased demand for dollars for imports and a drop in cocoa earnings.