The Bank of Ghana, which is grappling with runaway inflation, is expected to deliver another significant interest rate hike at its meeting later this month, with the country’s currency and public finances still under pressure, according to a Reuters poll of economists. Meanwhile, Nigeria’s central bank is expected to keep its key interest rate unchanged at the end of its meeting.
The Central Bank of Kenya is also expected to maintain steady interest rates at its meeting later this month. A survey of eight analysts conducted from January 18 to 23 predicts the Bank of Ghana raising rates 175 basis points to 28. 75%, with only two expecting the bank to hold at 27.00% and the rest expecting a hike in the 100-400 basis point range.
Ghana’s consumer inflation rose to 54. 1% in December, the highest level in 22 years, due to increases in fuel, utilities, and food prices. Rates in Ghana are expected to rise another 25 basis points to 29. 00% in March before remaining unchanged in May. The central bank is expected to reduce them by one percentage point each in the third and fourth quarters of this year.
Last year, Ghana’s cedi was the world’s worst-performing currency. Following four consecutive rate hikes at its previous meetings, Nigeria’s benchmark rate is expected to remain unchanged at a much more modest 16.5%.
Based on six out of seven forecasts, Kenya’s central bank is expected to keep rates unchanged at 8.75% on January 30. In a separate poll, South Africa’s Reserve Bank is expected to raise its repo rate for the last time in this cycle in anticipation of slower inflation, adding 50 basis points on Jan. 26.