©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 kept its benchmark interest rate at 29% on Monday, saying inflation prospects had worsened slightly over the past two months and required close monitoring.
The West African cocoa, gold and oil producer has restructured its debts as it seeks to emerge from the worst economic crisis in a generation, supported by a $3 billion program from the International Monetary Fund (IMF).
At its last rate-setting meeting in January, the Bank of Ghana lowered its policy rate by 100 basis points, citing the need to maintain a strong stance, while stressing that inflation had fallen sharply during 2023.
Inflation rose slightly in January before slowing again in February, and central bank governor Ernest Addison said at a news conference that the latest inflation forecasts showed a higher profile than in January.
“Overall risks to inflation are modestly to the upside and will require close monitoring. Given these considerations, the committee has decided to maintain the policy rate at 29%,” he said.
Addison said he expected the IMF to visit Ghana for a second review of its Extended Credit Facility-backed program in April.
If the visit is successful, the IMF executive board could meet to discuss the second review in May and possibly approve another loan disbursement, he added.
“The implementation of fiscal policy so far has been broadly consistent with the objectives of the IMF- and ECF-supported programme,” Addison said.
Ghana reached a deal in January to restructure $5.4 billion in loans with its official creditors. Now he is pushing for a deal with holders of about $13 billion in international bonds.