Accra – Ghana’s central bank opted to keep its key interest rate unchanged at a hefty 29% on Friday, despite mounting pressure to ease the monetary policy grip. The decision comes as the West African nation grapples with persistent inflation and a fragile economic recovery.
Economists had widely anticipated a rate cut of half a percentage point, given that inflation has been trending downward. However, the Bank of Ghana governor, Ernest Addison, cited lingering uncertainties about the inflation outlook as the reason for maintaining the status quo.
Ghana’s annual inflation rate eased slightly to 22.8% in June from 23.1% the previous month, but it remains far above the central bank’s target band of 8% plus or minus two percentage points. While the government is optimistic about hitting a year-end inflation target of 15%, the central bank appears cautious.
The decision to hold rates reflects concerns about the cedi’s recent weakness and the potential for renewed inflationary pressures. The country is currently undergoing a debt restructuring process to navigate its worst economic crisis in decades.
