Central Bank of Ghana’s Latest Rate Hike Is Smaller than the Previous Five Moves

January 30, 2023

In Ghana, where consumer price inflation soared from 12.6% at end-2021 to 54.1% last month, officials at the Bank of Ghana increased the policy interest rate from 14.5% coming into March 2022 to 27.0% by last November. The near doubling was accomplished in just five months, with increments of 250 basis points in March, October and November, 200 basis points in May and 300 bps in August. Today’s further policy rate hike to 28% was only 100 basis points in size, matching an initial tightening in November 2021. Ghana has experienced a textbook vicious cycle of reinforcing currency depreciation and domestic price inflation. The U.S. dollar is worth 127% more against Ghana’s currency than a year ago.

Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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