Ghana - Riba

The Bank of Ghana held its benchmark interest rate at 16% during its September meeting, as widely expected, saying that economic growth remains strong and the medium-term outlook is positive, amid expectations of higher production in the oil and gas and mining sectors. Policymakers noted that despite headline inflation continued its downward trajectory, underlying price growth and inflation expectations rose slightly, reflecting emerging pressures coming mainly from the recent upward adjustment of utility tariffs, ex-pump prices and transport fares; and whose impact have to be monitored closely over the next quarter. Meantime, the bank voiced concerns about the country's fiscal situation and the slowdown in global economy.

The Bank of Ghana held its benchmark interest rate at 16 percent during its July meeting, saying that economic growth is expected to remain robust in the second half of the year while inflation has remained within the target range in the last 15 months. Still, policymakers voiced concerns about uncertainties surrounding global trade and geopolitical tensions.

The Bank of Ghana held the prime lending rate steady at 16% at its May 27th 2019 meeting, as widely expected. Policymakers said that despite the rise in headline inflation to 9.5% in April 2019 from 9.3% in March, it remains inside the medium term target band and inflation expectations are well-anchored. Also, the cedi has recovered most of the losses since a surprise rate cut in January led the currency to weaken sharply against the dollar. The bank added that economic growth remains relatively strong and it is projected to gain steam, supported by oil production. The Committee will continue to closely monitor both global and domestic developments and stands ready to take appropriate measures if necessary to maintain price stability.

The Bank of Ghana kept its prime lending rate steady at 16% at its April 1st 2019 meeting, as widely expected. Policymakers said that despite the uptick in annual inflation to 9.2% in February 2019 from 9.0% in January, it stands within the medium term target band and inflation expectations are well-anchored. The bank added that economic activity picked up to 3.2% in January 2019 from 2.4% in December. Moreover, the economy is projected to expand by 5.6% in 2018 and 7.6% in 2019, with the preparation of new oil wells including those of AKER ENERGY, the re-opening of operations at the Obuasi mine, and the implementation of growth-oriented government initiatives as main drivers of growth. However, it was noted the sustained weakness of the cedi against the major international currencies in February and March 2019. In January, the surprise rate cut led the cedi to weaken sharply against the dollar to close an all-time low.

The Bank of Ghana lowered its prime lending rate by 100 points to 16 percent at its January 28th 2019 meeting, bringing it to the lowest rate since 2013. Markets had expected no change in monetary policy. Policymakers said that the disinflation process continued in 2018 and inflation is expected to stay within the medium-term target range (8 +/- 2 percent), barring any unanticipated shocks. In December, the inflation rate edged up to 9.4 percent from 9.3 percent in November. Meanwhile, the bank suggested that it may lower its inflation target to contain price-growth expectations. The Committee added that the economic growth has been firm and it is projected to be at 5.6 percent in 2018.