Ghana’s inflation rate rose to a three-month high in June on higher food prices, raising pressure on the central bank to resume rate hikes later this month.
(Bloomberg) — Ghana’s inflation rate rose to a three-month high in June on higher food prices, raising pressure on the central bank to resume rate hikes later this month.
Annual inflation accelerated to 42.5% from 42.2% in May, Government Statistician Samuel Kobina Annim told reporters in the capital, Accra. Of the eight economists in a Bloomberg survey only one expected an acceleration. Food inflation quickened to 54.2% from 51.8% last month and non-food price growth decelerated to 33.4% from 34.6%. Prices rose 3.2% in the month.
“Another rate hike at the end of the month is likely, I am expecting a 250 basis-point hike to bring the policy rate to 32%,” Mark Bohlund, a senior credit research analyst with REDD Intelligence, said ahead of the release. Treasury-bill yields “have continued to rise during July, especially in the three-month bills, and I expect this to continue until market participants have higher confidence that the Bank of Ghana will be able to bring inflation down.”
The central bank’s policy committee on May 22 paused its steepest phase of monetary tightening that was aimed at reining in inflation and halting a slide in the cedi. It kept the key rate unchanged at 29.5% on expectations that inflation would continue slowing toward its 6% to 10% target band, in part because of a stable cedi and adhering to the conditions of a $3 billion International Monetary Fund bailout clinched in May.
–With assistance from Simbarashe Gumbo.
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