Ghana keeps key rate steady, says positive about IMF deal - CNBC Africa

Ghana keeps key rate steady, says positive about IMF deal

Western Africa

by Reuters 0

The Bank of Ghana held its main policy rate unchanged at 21 per cent on Wednesday. PHOTOS: Getty/IMF

This was in a widely expected move and cited a moderated risk to inflation due to lower oil prices, its Governor Henry Kofi Wampah said.

The government is due to start a final round of talks on Wednesday with the International Monetary Fund for a financial package aimed at resolving fiscal problems that have helped slow growth in an economy that produces gold, cocoa and oil.

Wampah said he was "very positive" the talks would lead to a deal. At the same time, the government is looking to revise its 2015 budget projections in light of the oil price slump.

"The pass through effects of falling crude oil prices, declining inflation expectations ... fiscal consolidation and a possible program with the IMF are expected to exert some downward pressure on inflation," Wampah told a news conference.

Inflation slowed to 16.4 per cent in January, still higher than the regional average, while the cedi currency fell 31 percent in 2014. The bank set a revised target for end year inflation at 12-13 per cent from 11.5 per cent, Wampah said.

The bank raised rates to 21 per cent in November from 19 per cent and narrowed its interest rate corridor to 300 basis points around its main rate compared with 500 points.

Comments