The Ghanaian Central Bank has announced the increase of key interest rates 30% in a determined bid to curb the country’s soaring inflation.
Africa Today News, New York reports that this hike represents a 0.5% increase.
The hike was announced on Monday evening at the end of its monetary policy meeting.
‘A hike in rates is the best way to go in the midst of the crisis,’ financial analyst Richmond Frimpong told reporters on Tuesday morning.
This makes it more expensive to borrow money, and is intended to reduce consumer spending.
Read Also: Nigeria’s Inflation May Hit 30%, Bank Of America Warns
The West African nation has been grappling with a battered economy marred by inflation currently over 42%, huge public debts and a cost-of-living crisis.
Africa Today News, New York recalls that last Friday, the World Bank said about 850,000 more Ghanaians were pushed into poverty by the end of 2022 owing to the rising cost of living marred by a loss in purchasing power, and an increase in food prices.
Africa’s largest gold producer has received $600m (£518m), the initial tranche of a $3bn bailout programme from the International Monetary Fund aimed at stabilising its economy while it embarks on debt restructuring and other economic policies aimed at boosting revenues.
A few weeks ago, the Bank of America had come to reveal that the Monetary Policy Committee of the Central Bank may need to increase interest rates by at least 700 basis points before the end of the year to curb inflation.
In an interview with Bloomberg which was monitored by Africa Today News, New York on Tuesday morning, the bank’s sub-Saharan Africa Economist, Tatonga Rusike, pointed out the hike was necessary to tackle soaring inflation occasioned by the fuel subsidy removal and unification of foreign exchange.
Rusike explained that at the current trend, inflation may quicken to 30 percent by the end of the year from 22.4 percent in May, noting that the nation’s apex bank may need to push up the rates.