ACCRA (Reuters) – Ghana’s central bank kept its benchmark interest rate unchanged at 17 percent on Monday to cushion the West African economy against possible global pressures on emerging economies, governor Ernest Addison said.
The decision, the third hold this year, also helps to stabilise the local currency which has come under marginal pressure in recent weeks, Addison told reporters in Accra.
“The latest assessment shows that there are underlying pressures including risks in the continuing escalation of global trade pressures, steady rise in global inflation, further hike in U.S interest rates and a strong U.S dollar,” Addison said.
Ghana, which exports cocoa, gold and oil, is in its final year of a $918 million aid programme with the International Monetary Fund to narrow fiscal deficit, reduce debt and cut inflation to 8 percent, plus or minus 2 percentage points by the end of year.
The local currency depreciated 7.8 percent since January, above the bank’s end-year projection of less than 5 percent while public debt rose to $35.8 billion or 57.2 percent of gross domestic product at the end of September from $31.6 billion or 54.3 percent.
Addison said majority of commercial banks operating in the country were close to meeting the central bank’s new minimum capital requirement of 400 million cedis before the start of 2019.
Reporting by Kwasi Kpodo; Editing by Toby Chopra and Alison Williams