Central bank raises benchmark policy rate to 26.0 pct

folarin okunola

November 16, 2015 2:45 PM

The West African nation is under a three-year aid programme worth $918 million with the International Monetary Fund (IMF) to restore fiscal balance to an economy dogged by a high fiscal deficit

A man trades U.S. dollars for Ghanaian cedis at a currency exchange office in Accra, Ghana, June 15, 2015. Picture taken June 15. REUTERS/Francis Kokoroko

The Bank of Ghana raised its main policy rate by 100 basis points to 26.0 percent on Monday to offset the risk of inflation, its governor Henry Kofi Wampah said.

The West African nation is under a three-year aid programme worth $918 million with the International Monetary Fund (IMF) to restore fiscal balance to an economy dogged by a high fiscal deficit, a debt-to-GDP level close to 70 percent, and a falling currency.

"Overall, the risks to inflation were on the upside and the indications are that the rate is likely to drift further away from the target band," Wampah told a news conference.

Inflation stood at 17.4 percent in October, unchanged from the previous month.

Ghana's economy is expected to pick up speed next year, even as the government abides by spending limits set by the IMF, Finance Minister Seth Terkper said when he presented next year's budget to parliament on Friday. [L8N1383FQ]

Inflation was due to fall slightly to 10.1 percent next year from 11.5 percent in 2015, Terkper said.

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