Ghana Central Bank wins breathing space as inflation eases
Ghana’s inflation rate fell to a 12-month low in September, providing room for the central bank to leave borrowing costs unchanged next month.
Annual inflation eased to 38.1% from 40.1% in August, Government Statistician Samuel Kobina Annim told reporters in the capital, Accra, on Wednesday. The median of five economists’ estimates in a Bloomberg survey was 37.3%.
The cedi gained 0.1% to 11.7521 per dollar by 10:16 a.m. in the capital, Accra. The nation’s dollar bond maturing in 2032 fell 0.3 cents to 43.29 cents on the dollar.
The main contributor to the deceleration was food. Food inflation cooled to 49.4% from 51.9% in August, and non-food price growth was 29.3%, compared with 30.9% in August. Prices rose 1.9% month-on-month.
What Bloomberg Economics Says…
The year-on-year slowdown affirms the central bank’s decision to hold rates in September. But the MoM rate increased (1.9 vs -0.2) implying that price increases remain strong — Yvonne Mhango, Africa economist
Slowing inflation and expectations by the central bank’s monetary policy committee that it will moderate to 29% by year-end — helped by a more stable cedi — may prompt the MPC to leave borrowing costs unchanged at 30% for a second straight meeting when it announces its decision on Nov. 27.
The cedi has steadied since Ghana secured an emergency bailout from the International Monetary Fund in May and after the central bank built up its reserves.
Another pause may provide relief to households battling to make ends meet because of high prices and borrowing costs that have been fueling anti-government protests.
Last week, thousands of Ghanaian opposition members marched through the streets of Accra to demand central bank Governor Ernest Addison and his two deputies — Maxwell Opoku-Afari and Elsie Addo Awadzi — be fired for failing to rein in surging prices.
