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Ghana central bank cuts key rate as inflation cools

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The governor of Ghana’s central bank has stated that the country’s economy is still recovering strongly and that inflation is continuing to decline, causing the bank to drop its main interest rate by 200 basis points to 27%. This was the first rate cut since January.

 

At a press conference Friday, Bank of Ghana Governor Ernest Addison stated that economic indicators point to a proceeding disinflation, with price increases continuing to moderate in the direction of the year’s short-term range target of 13% to 17%.

 

“Such a strong signalling of the monetary policy rate by reducing it by 200 basis points tells you that the central bank is quite satisfied with the progress of recovery of this economy,” Addison said, adding that all indicators including growth, inflation and fiscal policy are improving.

According to Reuters polled economists in July, Ghana’s interest rate is predicted to drop by 200 basis points by year’s end.

 

 

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

 

 

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

 

 

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

 

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

 

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

 

Economists surveyed by Reuters in July expected that by year’s end, Ghana’s interest rate will have decreased by 200 basis points.

 

 

“This easing of policy is understandable, given that the recent falls in inflation had caused real interest rates to rise, something that this cut will partially reverse,” said Leslie Dwinght-Mensah, economist and research fellow at Accra-based Institute for Fiscal Studies.

 

 

“The strong rate of economic activity, which official data recently revealed, also gave the central bank the comfort to take this step.”

 

Following the completion of preliminary debt restructuring negotiations with two bondholder groups, Ghana extended an invitation to holders of its approximately $13 billion worth of international bonds to exchange their holdings for new instruments.

 

Bondholders can accept the offer until September 30.

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Moroccan annual inflation rises to 0.8% in November

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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

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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.”

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