Ghana’s central bank raised its benchmark interest rate for the first time since 2015, citing “significant” inflation risks.
The monetary policy committee lifted the rate by 100 basis points to 14.5%, the Bank of Ghana said in a statement Monday. The median estimate of nine economists in a Bloomberg survey was for the gauge to remain unchanged. Only two of nine forecast a hike and neither of them expected as much as a percentage point.
The increase — the first since November 2015 — unwinds some of the 250 basis points of easing announced since last year to prop up the West African nation’s coronavirus-ravaged economy. It comes after inflation accelerated to a 15-month high of 11% in October and breached the top of central bank’s target band of 6% to 10% for a second straight month.
“These elevated inflationary risks require prompt policy action to re-anchor inflation expectations to safeguard the central bank’s price stability objective,” the MPC said in a statement. The committee had room to move after it said recent data showed increased momentum in the pace of the economy’s recovery from the impact of the coronavirus pandemic.
