The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has raised the policy rate by 250 basis points to 24.5%.
The policy rate indicates the interest rate at which the central bank lends to commercial banks in the country.
The decision was taken after an emergency meeting by the committee to review developments in the economy after inflation hit 33.9% in August.
Speaking at the 108th MPC press briefing in Accra on Thursday (6 October), the Governor of the BoG, Dr Ernest Addison said, heightened economic and policy uncertainties, inflationary pressures, and weakening of the cedi against the US dollar as among the reasons for the increment.
“Inflation remains elevated and the balance of risks is on the upside. Although the forecasts are for monthly inflation to continue to slow down, the risks are on the upside, emanating largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations,” Addison added.
However, the central bank said it remains committed to re-anchoring inflation expectations and returning to a disinflation path.
The central bank raised its main lending rate by 300 basis points to 22% last month at an emergency meeting to address inflation (running above 30%) and other economic problems.
Ghana formally requested assistance from the International Monetary Fund (IMF) in July, and a negotiation team is expected to arrive in Ghana for a round of talks early next week.