Ghana: Central Bank holds fire again in July
At its meeting on 23–26 July, the Bank of Ghana (BOG) decided to maintain the policy rate at 29.00%. The hold—the third in a row since March—had been largely priced in by markets.
The decision to hold was driven by heightened uncertainty regarding the inflation outlook, largely stemming from depreciatory pressure on the cedi, upward adjustments to utility tariffs and higher fuel prices. Although the BOG expects inflation to remain within its 6.0–10.0% target band this year, it noted that risks to the outlook are skewed to the upside. Additionally, Q1 GDP growth was stronger than anticipated, giving the Bank room to keep interest rates higher for longer.
The BOG’s communiqué did not provide explicit forward guidance. All of our panelists—bar one who expects rates to remain unchanged—expect the Bank to resume its loosening cycle this year. That said, there is a large spread: Panelists have penciled in 100–600 basis points of cuts by end-2024. The Bank will meet next on 25–27 September, with the decision to be announced three days later.