The Bank of Ghana raised its main lending rate by 250 basis points to 17%, signalling an aggressive stance against the rocketing price of goods from flour to sugar to fuel, and against a depreciating local currency that has dented investor confidence.
Consumer inflation reached 15.7% year-on-year in February, the highest since 2016. Food, transportation and housing prices have seen the greatest spikes.Restaurants and bakeries have downsized menus and laid off staff. The national taxi drivers union has threatened to strike over spiralling fuel costs. L5N2VD7O1
Meanwhile, Ghana's cedi has weakened by about 20% against the dollar this year, making it the second-weakest currency after the Russian rouble in a list of some 20 emerging market units tracked by Reuters. The central bank has made efforts to improve the situation. Monday's rate hike marks the first time it has increased the prime rate twice within one year since 2015, after a previous one in November.