(Ecofin Agency) – The Central Bank of Ghana has decided to raise its key rate, due to global inflationary pressures affecting the national economy. A decision that comes as the country has recorded a drop in its overall inflation over two consecutive months.
The Central Bank of Ghana raised its policy rate by 150 basis points to 29.5% from 28% in January 2023. The announcement was made by the Monetary Policy Committee (MPC) on Monday, March 27.
According to the CPM, the effects of global inflationary pressures facing the domestic economy might be amplified by ” vulnerabilities, including structural excess liquidity following the Domestic Debt Swap Program (DDEP) and widening negative output gap ».
The move comes once morest a backdrop of Accra recording a decline in headline inflation for two consecutive months. Indeed, it fell from the peak of 54.1% in December 2022 to 53.6% in January 2023, then to 52.8% in February, according to Bank data. This latest decline was attributed to lower food inflation, while non-food inflation remained broadly stable.
Need we remind you, in December 2022, the Ghanaian government announced the closure of its domestic debt swap program, with a participation rate of more than 80%. This brings the country a little closer to the possibility of benefiting from a 3 billion dollar rescue plan from the International Monetary Fund (IMF) aimed at ” restore macroeconomic stability”.
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