Fitch Solutions predicts potential upward risks to Ghana’s interest rate outlook, pointing to geopolitical tensions and disruptions in global trade that may result in higher commodity prices.
In their recent article titled “More Interest Rate Cuts On The Way In Ghana, Following Cautious Start Of Easing Cycle,” they suggest that Ghana, being a net importer of fuel and food items, could face increased import costs, which could disrupt the disinflation process.
The report underscores the risk of stalled negotiations between Ghana and its commercial creditors, which could potentially delay International Monetary Fund (IMF) disbursements and undermine investor confidence.
Such a scenario could lead to a sell-off of the cedi and a resurgence of inflation, prompting the Bank of Ghana to adopt a more conservative monetary easing cycle than initially anticipated.
Despite these concerns, interest rates in Ghana have generally remained stable. According to the Bank of Ghana, there has been a downward trend in rates at the short end of the yield curve.
In December 2023, the 91-day and 182-day Treasury bill rates decreased to 29.49% and 31.70%, respectively, compared to 35.48% and 36.23% in the corresponding period of 2022. Similarly, the rate on the 364-day instrument decreased to 32.97% in December 2023 from 36.06% in December 2022.