Bank of Ghana Keeps Interest Rate at 29%

The Bank of Ghana kept its benchmark monetary policy rate steady for a third consecutive meeting at 29% on May 27th 2024, aiming to control inflation and boost the local currency.

The apex announced decision to keep rate on Monday, saying inflation would remain within the bank’s expected range. The central bank took a pause on hawkish mode to allow economic growth while keeping tabs on consumer price index.

Ghana’s annual consumer inflation eased slightly to 25% in April 2024, from a four-month high of 25.8% in March, but stayed well above the central bank’s target band of 6% to 10%.

At the Bank of Ghana’s last rate-setting meeting in March, it also maintained its policy rate, saying the inflation outlook had slightly worsened and required close monitoring.

The pressure in the foreign exchange market of the cedi (GHS) currency reflected increased demand for higher imports, energy sector payments, and uncertainty surrounding the progress of debt restructuring negotiations with external creditors.

These conditions have fed into sentiments and contributed to additional pressures, added BoG. On a year-to-date basis, the cedi depreciated by 14.6% against the US dollar (USD) as of last Wednesday, compared with 21.8% depreciation for the first five months of 2023.

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