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Posted on: Tuesday, March 22, 2022 – 3:54 AM | Last update: Tuesday, March 22, 2022 – 3:54 AM
Ghana’s central bank announced on Monday it will increase its key interest rate for the second time since last November, bringing the interest rate on three-year loans to 17%, exceeding analysts’ expectations.
Ghana’s central bank governor, Ernest Addison, told reporters today that the Monetary Policy Committee raised the interest rate by 250 basis points, while the average forecast of analysts polled by Bloomberg News was for a rate increase of only 100 basis points.
Addison added that the members of the Monetary Policy Committee expect the inflation rate to rise in the near term, provided that the price inflation rate returns to the target range, ranging between 6 and 10% annually within a year.
Addison said that the last meeting of the Monetary Policy Committee faced many challenges represented in tightening monetary policy in the world, severe pressure on the local currency exchange rate and high inflation.
Bloomberg indicated that the decision to raise interest rates today came at a time when the price of the Ghanaian cedi fell once morest the US dollar to record levels, while the inflation rate rose last February to 15.7 percent, the highest level in nearly six years.