The Bank of Ghana on Friday held its benchmark interest rate unchanged at 28 percent, citing a stronger local currency and easing inflation.
Bank of Ghana Governor Johnson Asiama noted at the Monetary Policy Committee (MPC) press briefing that the cedi appreciated by 24.1 percent against the U.S. dollar between January and May, largely due to policy interventions that helped the country accumulate about 10.1 billion U.S. dollars in reserve, placing Ghana in a relatively stable reserve position.
“The appreciation of the cedi is largely due to the market. It is not that the central bank is using its reserves to intervene in the market. The appreciation is driven by economic policy, monetary policy, higher remittances, and inflows from international trade,” Asiama said.
The stronger cedi has contributed to a 2.6 percentage point decline in inflation over the first four months of the year, the governor said, adding that the government is implementing measures to ensure resources are available for current and future debt servicing while continuing to build up foreign reserves.
In May 2023, Ghana secured a three-year bailout package of three billion dollars from the International Monetary Fund to curb inflation, stabilize the currency, and support economic recovery. Enditem
Source: Xinhua
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