Ghana’s central bank, the Bank of Ghana, has announced a major reduction in its primary interest rate by 100 basis points, to 29%, in an effort to support the country’s economy amid continuing debt restructuring efforts.
The decision, disclosed on Monday, comes in the wake of a fifth consecutive month of decelerating consumer inflation in the West African nation.
Ghana has been navigating its way through a severe economic downturn, marked as the most profound crisis in a generation.
In an effort to chart a course towards recovery, the country has been engaged in restructuring its debt, focusing on negotiations with both commercial and bilateral lenders.
The interest rate cut is anticipated to facilitate credit expansion, invigorate investments, and stimulate overall economic growth.
Ghana’s inflation rate witnessed a notable decline in December, reaching 23.2% year on year. This marks a steady decrease from 26.4% in November and a more substantial drop from October’s figure of 35.2%.
The reduction in inflation aligns with the central bank’s efforts to bring it within the targeted range. The Bank of Ghana aims to achieve an inflation rate of 8%, with a margin of error set at 2 percentage points on either side of the target.