Amidst Recession, Bank Of Ghana Raises Interest Rate To 27%

The Bank of Ghana (BoG) has raised its benchmark interest rate from 24.5 percent to 27 percent.

Ernest Addison, governor of BoG, on Monday said the decision is expected to anchor inflation expectations in the country.

In October, inflation in the West African country hit 40.4 percent — its highest rate in 20 years.

“The committee is of the view that significant upside risks to the inflation outlook remain. To continue to anchor inflation expectations, the committee, therefore, decided to increase the policy rate by 250 basis points to 27.0 percent,” he said.

Addison, also the chairman of the bank’s monetary policy committee, said the country’s inflation is forecast to peak in the first quarter of next year.

He added that inflation could settle at around 25 percent by the end of 2023 if a tight policy stance was maintained.

“The inflation forecast shows that in the outlook, inflation will likely peak in the first quarter of 2023 and settle at around 25 percent by the end of 2023,” Addison said.