The Bank of Ghana raised its benchmark monetary policy rate by a further 250 bps to 24.5% during its October 2022 meeting, above market forecasts of 23%, bringing borrowing costs to the highest since 2017.

It marks the fourth consecutive hike this year, in order to contain strong inflationary pressures and support the cedi which depreciated by 37.5% against the dollar in the year to September.

Policymakers said inflation remains elevated and the balance of risks is on the upside, stemming largely from pass-through effects of the currency depreciation, the recent upward adjustment in utility tariffs, and rising inflation expectations.

The annual inflation rate quickened for the 15th straight month to 33.9% in August, the highest since 2001 and far above the bank’s targeted band of 8% +/- 2 percentage points.

Meanwhile, the bank noted that the domestic economy strengthened in the second quarter but the latest high-frequency indicators signalled some moderation in economic activity.

Credit: Trading economics