Ghana maintains high interest rate

Ghana’s central bank decided to keep its main interest rate at 29%, highlighting concerns over the country’s inflation outlook.

Despite a slight increase in inflation in January followed by a slowdown in February, policymakers expressed a need for continued vigilance.

Facing economic challenges, including restructuring debts amid its worst crisis in decades, Ghana is supported by a $3 billion IMF program. To encourage lending and boost economic activity, the central bank adjusted the Cash Reserve Ratio (CRR) for banks, aiming to discourage excessive investment in Treasury bills.

Central bank governor Ernest Addison emphasized the importance of banks focusing more on lending to stimulate economic growth. The IMF is set to conduct a second review of Ghana’s Extended Credit Facility-backed program in April, with potential approval for further financial support in May if successful.

Source: Reuters