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Ghana plans to raise rates by 175 basis points later in January. Here’s why

Published

2 years ago

January 24, 2023

There are indications to believe that the Bank of Ghana, plans to deliver another hefty interest rate hike at its meeting later this month, with the country’s currency and public finances still under pressure.

A survey by news agency earlier this year points to a possible plan that the Bank of Ghana to raise rates 175 basis points to 28.75%, with only two expecting the bank to hold at 27.00% and the rest opting for a hike in a 100-400 basis point range.

“In Ghana, despite the central bank delivering 1,350 basis points of interest rate hikes, inflation has continued to rise,” said Virág Fórizs at Capital Economics.

“With price pressures showing no sign of easing, we expect policymakers to raise the benchmark rate further,” said Fórizs.

According to a senior economist at Oxford Economics, Pieter du Preez, said developments in the Ghanaian economy are unique at this stage and cannot be directly compared to other economies and central bank decisions elsewhere, where the trend is to slow the pace of tightening.

“The cedi appreciating in December will aid in driving inflation lower, but we only forecast this to happen from February or March onwards,” du Preez said.

As part of the many moves to get out of the economic doldrums, Ghana recently offered to pay holders of its 2023 bond a 2% cash fee in exchange for registering for the exchange.

Ghana’s currency, Cedi is currently rated the world’s worst-performing in 2022 as investors continued to squeeze foreign capital into the West African country.

Related Topics:Economy Featured Ghana Interest rate

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Moroccan annual inflation rises to 0.8% in November

Published

1 day ago

December 21, 2024

Ifeoluwa Dada

Morocco’s statistics office has confirmed that the country’s annual inflation rate, as determined by the consumer price index, increased from 0.7% in October to 0.8% in November.

Monthly, consumer prices decreased by 0.2% from October.

The primary driver of inflation, food costs, grew by 0.8% compared to the previous year, while non-food inflation climbed by 0.7%. Core inflation, which does not include more erratic items like food, increased 2.6% annually and 0.2% monthly.

According to the central bank, inflation is expected to average 1% this year, down from 6.1% last year.

Despite the Al-Haouz earthquake, a spike in inflation, and worldwide economic challenges, Morocco’s GDP grew by 3.4% in 2023.

A recovery in tourism, robust industrial exports, and rising private consumption—all bolstered by prudent macroeconomic policies—were the main drivers of growth.

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Nigeria’s $42bn foreign reserves enough for 9 months’ imports— Central Bank

Published

2 days ago

December 20, 2024

Ifeoluwa Dada

According to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), the nation’s $42.01 billion in foreign reserves can cover imports of goods and services for almost nine months.

Cardoso promised Nigerians improved economic fortunes in 2025 while addressing the Senate Committee on Banking, Insurance, and Other Financial Institutions yesterday in Abuja at the presentation of the performance index report.

Cardoso stated: “External Reserves rose from $ 38.35 billion it was on September 30, 2024, to $ 42.01 billion as of December 12, 2024”.

He clarified that third-party receipts in Q3 2024 and revenues from taxes connected to crude oil were the main drivers of the rise in foreign reserves during the specified time.

“We saw remarkable improvements in our trade balance and maintained a current account surplus,” he added.

“Our external reserves level can finance over 9.09 months of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks”.

On cash shortage, the CBN boss reiterated the N150 million fine against any branch of banks caught illegally distributing new Naira notes to currency hawkers and unscrupulous elements and said the Nigerian economy will improve in 2025 through policies and measures.

He predicted a stronger economic future: “Despite our economy’s challenges, there are clear reasons for optimism.

“The gradual stabilization of the forex market, ongoing banking sector recapitalization, and positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability.”