Databank: Ghana MPC likely to maintain MPR at 29%
Ghana’s Monetary Policy Committee’s deliberations enter day 3 as the authorities assess the next moves to rein in inflation. Analysts at Databank expect the MPC to maintain a hold stance while noting inflation upside risks emanate from the depreciation of the Ghana cedi and hikes in fuel and transport fares. Meanwhile, two government sources say Ghana has agreed to a memorandum of understanding with its bilateral creditors, including China and France, to restructure $5.4 billion of debt today. Kweku Akoh-Koomson, Economic Analyst at Databank joins CNBC Africa for more.
Fri, 24 May 2024 14:31:28 GMT
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AI Generated Summary
- The MPC is likely to maintain a hold stance given inflation risks stemming from currency depreciation and fuel price hikes.
- Ghana has reached an agreement with bilateral creditors to restructure a significant $5.4 billion debt, with the deal set to be finalized soon.
- Economic Analyst Kweku Akoh-Koomson emphasizes the importance of stability, proactive measures, and prudent policies in navigating current economic challenges.
Ghana's Monetary Policy Committee (MPC) is currently in the midst of deliberations as authorities assess the next steps to curb rising inflation. Analysts at Databank anticipate that the MPC will likely maintain a hold stance during this period, recognizing that the inflation risks are primarily driven by the depreciation of the Ghana cedi and recent increases in fuel and transport fares.
Moreover, in a significant development, Ghana has reportedly reached an agreement with its bilateral creditors, notably China and France, to restructure a substantial $5.4 billion debt. This memorandum of understanding is expected to be finalized today.
As the discussions continue, Kweku Akoh-Koomson, an Economic Analyst at Databank, provided insights on the current economic landscape and the expectations surrounding the MPC's decision.
During the interview with CNBC Africa, Akoh-Koomson emphasized that the MPC is likely to prioritize stability amidst the prevailing inflationary pressures. He highlighted key factors influencing the committee's decision-making process and shed light on the broader implications of the debt restructuring agreement.
The consensus among experts is that the MPC will opt for a cautious approach, considering the external challenges facing the Ghanaian economy. While the recent uptick in inflation poses concerns, the committee is expected to balance the need for price stability with supporting economic growth.
In light of these dynamics, Akoh-Koomson underscored the importance of proactive measures to mitigate inflation risks and ensure sustainable economic recovery. He stressed the significance of maintaining investor confidence and implementing prudent policies to navigate the current financial landscape.
Overall, the upcoming MPC decision holds significant implications for Ghana's economic trajectory. As policymakers grapple with the dual challenges of inflation and debt restructuring, the need for a balanced and strategic approach remains paramount.
As the deliberations progress, all eyes are on the MPC's announcement, which is anticipated to provide crucial insights into the country's monetary policy direction and economic outlook.
