ACCRA (Reuters) -Ghana’s central bank will assess whether its current monetary policy stance is enough to continue driving consumer inflation lower, governor Johnson Asiama said on Wednesday.
The Bank of Ghana raised its interest rate in a surprise decision in March after a marginal decline in inflation in February. However, the bank said it would later reassess the scope for monetary policy easing.
In opening remarks of the bank’s monetary policy committee meeting ahead of a rate decision expected on Friday, Asiama said multiple factors such as the foreign exchange rate and market confidence would be considered by committee members.
“As we approach our deliberations, we must carefully assess whether the current monetary policy stance remains adequate to drive disinflation without undermining the fragile growth momentum,” Asiama said.
“The inflation outlook, while improving, remains vulnerable to second-round effects,” he added.
Consumer price inflation slowed for a fourth month in a row in April, to 21.2% year on year from 22.4% in March. It remains well above the Bank of Ghana’s targets of 8% with a margin of error of 2 percentage points.
Asiama said that inflation continued to be affected by food supply constraints in northern Ghana and in the Sahel region, while commodity prices are affected by volatile global markets.
(Reporting by Emmanuel Bruce. Writing by Anait Miridzhanian. Editing by Mark Potter)
