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Ghana Central Bank Keeps Benchmark Interest Rate Steady at 16%
Posted on: 02-Dec-2013         Source: Bloomberg
The Bank of Ghana left its benchmark interest rate unchanged for a third consecutive meeting after it said inflation pressures increased since its last meeting in September.

The key rate was maintained at 16 percent, Governor Kofi Wampah told reporters in the capital, Accra today. That was in line with the forecasts of four of the eight economists surveyed by Bloomberg. The rest had predicted an increase of as much as 1 percentage point.

Inflation accelerated to 13.1 percent in October, the fastest pace in more than 3 1/2 years, after the government ended subsidies for fuel and raised tariffs for water and electricity to curb a budget deficit. The central bank raised the interest rate by 1 percentage point in May to support the cedi, which has dropped 16 percent against the dollar this year.

“The central bank believes at this stage that this is a temporary issue,” Samir Gadio, an emerging-markets strategist with Standard Bank Group Ltd. in London, said in an e-mail before today’s decision. “The CPI trend will improve next year.”

West Africa’s second-largest economy will expand 8 percent next year, faster than the estimated 7.4 percent this year, Finance Minister Seth Terkper said last week in a budget speech. The government will target narrowing the budget gap to 8.5 percent of gross domestic product next year from 10.2 percent this year, he said.