Ghana central bank announces rate hike to suppress inflationary pressure

ACCRA, May 23 (Xinhua) -- Ghana's central bank announced a further 200 basis points hike in its benchmark lending rate Monday to tame the ever-mounting inflationary pressure amid global price uncertainties and supply chain disruptions.

Ernest Addison, Governor of the Bank of Ghana, announced this at a press briefing after the bank's 106th Monetary Policy Committee (MPC) meeting.

"Based on our assessment, the MPC decided to raise the policy rate by 200 basis points to 19.0 percent," said Addison.

The central bank hiked its rate by a record 250 basis points to 17 percent in March to arrest the rising inflation, which rose to an 18-year high of 23.6 percent in April.

"Both headline and core inflation have stretched further above the upper limit of the medium-term target band. The heightened uncertainty surrounding the inflation dynamics has weighed heavily on the domestic environment and significantly depressed business and consumer sentiments," said the governor.

He added that the unavailability of inputs for food production, imported inflation, continued increases in the price of petroleum products, higher transportation costs, possible increases in utility tariffs, and potential wage pressure posed a higher risk to the inflation outlook.

"The MPC took the view that it needed to decisively address the current inflationary pressures to re-anchor expectations and help foster macroeconomic stability," said Addison.