23/7/2018/Reuters
Ghana’s central bank kept its benchmark interest rate unchanged at 17 percent as expected on Monday, mindful of the possible impact on inflation of pressure on emerging economies, governor Ernest Addison said.
The first hold this year also helps cushion any spillover effect from a potential trade war between the U.S and China, Addison told reporters in Accra.
Annualized inflation rose for a second time in a row to 10 percent in June while the local cedi currency, which had been fairly stable in the first quarter, depreciated around 6 pct in the last two months, Addison said.
“Global conditions are characterized by geopolitical tensions and uncertainties in the external environment … There are also concerns about further tightening of US monetary policy with adverse implications on capital flows and currency markets for emerging market and frontier economies,” he said.
“Given the circumstances, especially with regards to the global outlook, the committee decided to maintain the monetary policy rate at 17 percent while closely monitoring developments in the near-term,” he added.
Monday’s hold was expected and it would “calm the markets”, banking analyst Otuo Acheampong told Reuters.
Yet the local currency remained under pressure on Monday at 4.81 to the dollar, down from last week’s 4.79, Reuters data showed.
The major commodity exporter’s public debt amounted to $34.9 billion, representing 63.8 percent of GDP at the end of May, while its net international reserves stood at $4.15 billion at the end of June, representing 2.2 months of import cover.
Reporting by Kwasi Kpodo; Editing by Andrew Bolton