As markets await what many expect to be a hold on rates by the Monetary Policy Committee of the Central Bank of Nigeria, neighbours, Ghana, Monday announced it has shaved 1.5 percent off its key policy rate to 21 percent.
It was the country’s third straight cut for an equal number of meetings as inflation rose at its lowest rate in four years and the Ghanaian currency, the cedi, strengthened, according to a Bloomberg report monitored by businessamlive.
The rate was 22.5 percent before Monday’s meeting and the new rate, according to Ernest Addison, the governor of the bank, is the lowest since early 2015. The median of nine economists’ estimates was for a cut to 21.5 percent.
The central bank of West Africa’s biggest economy after Nigeria’s has cut the benchmark rate after inflation slowed from a record high in March last year and the currency recovers from an all-time low. The government has vowed to boost growth from last year when the economy expanded at its slowest rate in more than a quarter of a century.
Bank surveys on price growth “suggest dampening of underlying inflation pressures,” Addison said. The disinflation process “is still ongoing and this trend is likely to continue all through until the end of the third quarter.”
Consumer-price growth slowed to 12.1 percent in June from a record 19.2 percent in March 2016. The lender sees price growth slowing into the target band of 6 percent to 10 percent in 2018.
Since falling to a record low to the dollar on March 2, the cedi has strengthened 7 percent to become Africa’s best-performing currency after Mozambique’s metical and Zambia’s kwacha in the period. It strengthened 0.2 percent to 4.41 by 11:38 a.m.
There are signs of improvement in the economy of Ghana, the world’s biggest cocoa producer after Ivory Coast, with gross domestic product expanding 6.6 percent in the first quarter, the most in almost three years, as new oil fields started pumping crude.
Frontpage August 22, 2019