The Bank of Ghana raised its benchmark monetary policy rate by 200 bps to 19% during its May 2022 meeting, against market expectations of 18.75%.

It was the second consecutive rate hike this year, bringing borrowing costs to the highest level since February of 2018, to re-anchor inflation expectations and help foster macroeconomic stability.

The headline inflation accelerated to 23.6% in April, the highest in almost two decades, above the central bank’s preferred range of 6% to 10% for eight consecutive months.

Governor Ernest Addison said that central bank forecasts show a “prolonged horizon” for inflation to return to its target band.

Meanwhile, growth prospects in the domestic economy remain positive and the Bank’s high-frequency indicators point to continued and increased momentum in economic activities

Credit: trading economics