Ghana’s inflation rate fell more than expected in July, boosting the case for further interest-rate cuts

Ghana’s annual inflation dropped for the seventh consecutive month to 12.1 percent in July, Government Statistician Alhassan Iddrisu told reporters in the capital, Accra, on Wednesday giving room for further easing of monetary policies.

The drop to 12.1 percent from, compared with 13.7 percent in the previous month, is the lowest the country’s rate has been in almost four years.

According to Bloomberg, Africa’s biggest gold producer and the world’s second-largest cocoa grower is benefiting from a surge in the prices of the commodities, which have fueled a 39 percent rally in the cedi this year that’s helped rein in inflation.

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Last week, Ghana’s central bank slashed its benchmark interest rate by 300 basis points to 25 percent, the largest cut in its history, as inflation slows at a record pace.

The Bank of Ghana said the move reflects growing confidence in the disinflation trend, which has seen consumer prices fall faster than ever before.

Analysts project the cut in rates is only the beginning of an easing cycle and a likely reduction at its next meeting in September, as the country is also projected to hit single digit inflation before the end of the year.

The cocoa economy’s food inflation also dropped to 15.1 percent in July compared to 16.3 percent in the previous month.