Finance

Ghana’s policy rate of 27% highest in Africa – World Bank

Ghana’s monetary policy rate of 27.0% is the highest in Africa, the World Bank has revealed.

In its latest October 2024 Africa Pulse Report, the World Bank said the Bank of Ghana and other Central Banks have kept interest rates higher to anchor inflation expectations properly and secure a smoother path to their inflation targets.

“Central banks in countries that still have double-digit inflation and weakened domestic currencies (such as Angola, Nigeria, and Sierra Leone) will keep monetary policy rates higher for longer and, in fewer cases, they may increase their policy rates—particularly in countries where inflation rates still have not peaked. Broadly, currency weakness, slow fiscal adjustment, and cost pressures are among the factors driving these countries to keep a tighter stance for a longer period”.

For instance, it said Ethiopia, Ghana, and Nigeria are among the worst performing in Africa this year, and their currencies continue weakening while demand for foreign exchange remains pressing.

 

 

Nonetheless, the World Bank pointed out that with an improving inflation outlook and stabilising currencies, some countries are likely to end their hiking cycle and start reducing monetary policy rates.

However, price stickiness and the need to anchor expectations and restore the ability to achieve targets may delay benchmark rate cuts.

 

BoG cuts policy rate to 27.0% in September 2024

The Bank of Ghana cut its benchmark policy rate by 200 basis points to 27.0% in September 2024, the second rate cut since 2021.

Before that, UK-based Fitch Solutions in August 2024 stated that the Bank of Ghana would cut its policy rate by 200 basis points before the end of 2024.

The UK-based firm said though this decision aligned with its expectations, the significant depreciation of the cedi and the BoG’s hawkish tone have promoted it to revise its end-2024 forecast upward from 25.00%.

 

 

Source: Joy Business

Ogyem Solomon

Solomon Ogyem – Media Entrepreneur | Journalist | Brand Ambassador Solomon Ogyem is a dynamic Ghanaian journalist and media entrepreneur currently based in South Africa. With a solid foundation in journalism, Solomon is a graduate of the OTEC School of Journalism and Communication Studies in Ghana and Oxbridge Academy in South Africa. He began his career as a reporter at OTEC 102.9 MHz in Kumasi, where he honed his skills in news reporting, community storytelling, and radio broadcasting. His passion for storytelling and dedication to the media industry led him to establish Press MltiMedia Company in South Africa—a growing platform committed to authentic African narratives and multimedia journalism. Solomon is the founder and owner of Thepressradio.com, a news portal focused on delivering credible, timely, and engaging stories across Ghana and Africa. He also owns Press Global Tickets, a service-driven venture in the travel and logistics space, providing reliable ticketing services. He previously owned two notable websites—Ghanaweb.mobi and ShowbizAfrica.net—both of which contributed to entertainment and socio-political discussions within Ghana’s digital space. With a diverse background in media, digital journalism, and business, Solomon Ogyem is dedicated to telling impactful African stories, empowering youth through media, and building cross-continental media partnerships.

Related Articles

Back to top button