Ghana central bank cuts rates as inflation eases

7/25/2017 11:48:54 PM

Third rate cut in 2017. 

Ghana's central bank cut its benchmark interest rate by 150 basis points to 21.0 percent on Monday, citing a downward trend in consumer inflation and the potential for higher economic growth on increasing oil output.

The cut, which economists had expected, reflected lower risks to inflation helped by a slightly stabler local currency, Central Bank Governor Ernest Addison told a news conference in the capital Accra.

"Barring any unanticipated shocks, the current stance of monetary policy and the expected stability in the exchange rate should ensure price stability," Addison said.

Monday's cut was the third this year.

The bank expects headline inflation to continue to decline and converge toward its medium-term target of 8 percent plus or minus 2 percentage points in 2018, he added.

In June, it was just above 12 percent, down from a peak of more than 19 percent in Mark last year.

Addison said the rate setting committee also expects increasing crude oil production, boosted by this month's launch of production at ENI's offshore Sankofa field, to lift economic growth.

Ghana, which exports cocoa, gold and oil, is under a three-year aid deal with the International Monetary Fund to restore fiscal balance and economic growth.

Source: Reuters 

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