The Bank of Ghana is expected to conclude its series of interest rate hikes as Ghana’s headline inflation rate declined to 40.1% in August, reaching a 10-month low. The majority of analysts surveyed anticipate that the Bank will maintain its current interest rates in its upcoming meeting. Over the past two years, the Bank has increased rates by 1,650 basis points to combat high inflation.
Key Points:
- The Bank of Ghana is likely to conclude its interest rate hikes as Ghana’s headline inflation rate dropped to 40.1% in August, a 10-month low.
- Majority of analysts surveyed (10 out of 12) expect the Bank to maintain its current interest rates in the upcoming meeting.
- Over the past two years, the Bank has raised rates by 1,650 basis points in response to high inflation.
- The decline in inflation was primarily driven by a decrease in food prices. Food inflation slowed to 51.9% from 55% in July.
- Non-food price growth was 30.9% compared to 33.8%, and overall prices declined by 0.2% month-on-month.
- Ghana is currently experiencing significant economic challenges, leading to protests against the government due to economic hardships, high cost of living, and job scarcity.
Analysis: The anticipated conclusion of interest rate hikes by the Bank of Ghana reflects a response to improving inflation figures. However, the protests and economic challenges faced by Ghana indicate that there are broader systemic issues that need to be addressed.
Published by: Market News Nigeria