Latest Ghana Benchmark Rate Hike the Largest on Record — President Promises Action Against ‘Unacceptable Depreciation of the Cedi’

Latest Ghana Benchmark Rate Hike the Largest on Record — President Promises Action Against ‘Unacceptable Depreciation of the Cedi’

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by Terence Zimwara
After seeing Ghana’s inflation price surge to 31.7% in July, the Financial institution of Ghana responded by climbing the benchmark rate of interest by 300 foundation factors. Along with the speed hike, the central financial institution mentioned it should regularly elevate banks’ major reserve necessities. One knowledgeable has mentioned President Nana Akufo-Addo should trim the dimensions of his authorities.
In an try and tame the nation’s runaway inflation price, which topped 31.7% in July, the Ghanaian central financial institution hiked the benchmark rate of interest by 300 foundation factors. Following the most recent hike, which is the biggest improve on document since 2002, Ghana’s benchmark rate of interest is now 22 p.c.
Based on a Bloomberg report, the most recent improve means Ghana’s benchmark price has now risen by 550 foundation factors since November 2021. Along with rising the benchmark price, the Financial institution of Ghana (BOG) revealed in its emergency financial coverage committee (MPC) press launch that it plans regularly improve banks’ major reserve requirement from 12 p.c to fifteen p.c.
On the international trade entrance, the BOG statement mentioned measures to spice up the influx of international trade can even be applied. The assertion defined:
To spice up the availability of international trade to the financial system, the Financial institution of Ghana is working collaboratively with the mining companies, worldwide oil corporations, and their bankers to buy all international trade arising from the voluntary repatriation of export proceeds from mining, and oil and fuel corporations.
By taking these steps, the BOG mentioned it hopes to strengthen its international trade auctions.

President Nana Akufo-Addo Optimistic About Turning Round Ghana’s Financial Fortunes

In the meantime, the nation’s president, Nana Akufo-Addo, is quoted in a VOA report apportioning the blame for Ghana’s financial woes on the Covid-19 pandemic and the Ukraine-Russia struggle. Based on the Ghanaian President, it’s these elements which are inflicting difficulties not only for Ghanaians however for many individuals around the globe.
Nonetheless, regardless of these difficulties, Akufo-Addo instructed his authorities is as much as the duty at hand.
“We’re decided to deliver reduction to the Ghanaian folks. Different steps shall be taken, specifically, to take care of the unacceptable depreciation of the cedi. Reining in inflation, by bringing down meals costs, is a serious preoccupation of the federal government, and this season’s rising, profitable harvest will help us [to] obtain this goal, along with different insurance policies,” the president is quoted explaining.
Reacting to the BOG’s announcement, Braveness Kingsley Martey, an economist with Databank Analysis, is quoted within the VOA report stating that the steps taken by the central financial institution imply there are “going to be short-term penalties or tradeoffs.”
One other knowledgeable, Godfred Bokpin, a professor on the College of Ghana, mentioned it was time for President Nana Akufo-Addo to reveal he can rein in spending by lowering the dimensions of his authorities.
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Tags on this story
Bank of Ghana, cedi, COVID-19, depreciation, Foreign exchange, Ghana benchmark rate, inflation, President Nana Akufo-Addo, Ukraine Russia conflict, University of Ghana

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Terence Zimwara is a Zimbabwe award-winning journalist, writer and author. He has written extensively in regards to the financial troubles of some African nations in addition to how digital currencies can present Africans with an escape route.

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