The Bank of Ghana lifted its benchmark monetary policy rate further by 150 bps to 29.5% during its March 27th 2023 meeting, while most analysts had expected it to remain steady at 28%.
It marks the second consecutive rate hike this year, pushing borrowing costs to their highest level since at least January 2001, in an effort to re-anchor inflation expectations toward the medium target and thus put the economy firmly on the path of stability.
The headline inflation rate, though more than five times the 10% ceiling of the central bank’s target range, has dropped for the second consecutive month to 52.8% in February after reaching a record high of 54.1% in December. The bank said inflation is expected to reach 29% by the end of the year.
Meanwhile, the country is facing its worst economic crisis in decades and is in the process of restructuring its debt in order to secure a $3 billion loan from the International Monetary Fund.