ghana

The Bank of Ghana has cut the main policy rate from 18 to 16 per cent, hoping banks will reduce their rates too, helping to restore credit growth to the economy.

The bank is keen to push falling inflation down further. Annual inflation stood at 18 per cent in October, falling each month to 16.9, 15.9 and 14.8 per cent in January. The target range is 7.5 – 11.5 per cent. 

The Ghanaian central bank has all but declared war on the high interest rates charged by banks to consumers, and is threatening measures such as interest rate caps to bring them down.

Although the central bank’s base rate is 18 per cent – down 50bp in November – the country’s banks are charging average rates of about 30 per cent. The central bank has criticised the stickiness of the interest rates – banks are quick to raise them but slow to let them fall.