Ghana central bank hikes lending rate further to dampen inflation



*

Ghana central bank raises lending rate to 27%

*

Governor: hikes dampened pace of month-on-month inflation

*

Says IMF, mining firms informed about gold-for-oil scheme

By Cooper Inveen and Christian Akorlie

ACCRA, Nov 28 (Reuters) - Ghana's central bank on Monday raised its main lending rate GHCBIR=ECI by a further 250 basis points to 27% to try to quell inflation in an economy facing its worst economic crisis in a generation.

The cocoa, gold, and oil-producing nation, one of West Africa's largest economies, has experienced successive jumps in inflation which climbed to an annual 40.4% in October, a 21-year peak despite aggressive central bank lending rate hikes this year.

The local cedi currency GHS= has plummeted more than 50% against the dollar in 2022.

Bank of Ghana Governor Ernest Addison told a news briefing that the Monetary Policy Committee believed that there were signs that earlier rate hikes had dampened the pace of month-on-month inflation.

He said annual inflation could settle at around 25% by the end of 2023 if a tight policy stance was maintained.

Presenting the 2023 budget last week, the finance minister promised new measures to cut spending and boost revenue as the government negotiates a relief package with the International Monetary Fund (IMF).

Foreign bond haircuts are being considered as part of efforts to restructure spiralling debt.

Ghana's total public debt stood at $48.9 billion at the end of September, $28.4 billion of which was external, according to government figures.

A debt management strategy has been agreed with the IMF.

"We will not be paying a lot of money to service debt in 2023," Addison said.

"By the end of this year and by the time our debt operations are finalised it will begin to reflect in the budget and have its impact on the balance-of payments," he said.

Economists at Goldman Sachs forecast the benchmark lending rate to peak at 29% in the first quarter of next year, below current annualised inflation but above the 2023 year-end estimate from the central bank.

"However, given our expectation for (forex) reserves to decline further and ongoing downside risks to the cedi, we see risks tilted toward a higher terminal policy rate," they wrote.

GOLD-FOR-OIL SCHEME

Dwindling foreign currency reserves prompted a policy proposal last week whereby gold will be used to buy oil products rather U.S. dollars.

Major mining companies have been ordered to sell 20% of their refined gold to the central bank from Jan. 1, 2023, as part of the scheme.

AngloGold Ashanti Ltd ANGJ.J and Gold Fields GFIJ , both of which have operations in the country, said on Friday that they had not yet been formally informed about this.

Addison said on Monday that all major mines had been consulted and that the IMF was informed in October.

Using gold will allow Ghana to import $300 million worth of oil products next year, he added.

"The Fund is very much aware of our gold purchase programme," Addison said in response to a question.

"We were in Washington in October and we had technical discussions with them on that programme. I think they were more concerned with the monetary policy effects and implications, and issues of transparency and accounting. These were the issues that came up. But yes, they are very much aware."
Reporting by Cooper Inveen and Christian Akorlie; Additional reporting by Rachel Savage in Johannesburg and Rodrigo Campos in New York; Writing by Sofia Christensen; Editing by Alexander Winning, James Macharia Chege, Alison Williams and Marguerita Choy

Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.

Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.

Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.

Usamos cookies para lhe dar a melhor experiência no nosso website. Ler mais ou alterar as configurações de cookies.

Aviso de risco: O seu capital está em risco. Os produtos alavancados podem não ser adequados para todos. Recomendamos que consulte a nossa Divulgação de Riscos.