NewsWest AfricaBank of Ghana raises interest rates to rescue cedi

Fri,24Nov2017

Posted on Thursday, 06 February 2014 16:56

Bank of Ghana raises interest rates to rescue cedi

By Billie Adwoa McTernan

Ghanaian currency, the Cedi. Photo©ReutersGhana's central bank on Thursday raised interest rates by two percentage points to 18 percent as it seeks to halt the decline of the local currency.


Bank of Ghana's monetary policy committee led by the governor of the bank, Henry Kofi Wampah had to bring forward its quarterly meeting that was scheduled for February 17 to deal with challenges facing the economy.

 

Ghana's currency, the cedi, has been on a rapid decline since last year.

In January alone the cedi depreciated by 7.8 percent against the United States dollar compared to 0.2 percent over the same period last year.

The bank, will in addition to the higher interest rates, employ other methods to help the cedi's recovery.

In the medium to long term, the central bank hopes to broaden its tax and export base and reduce imports - in particular that of consumption goods that have local substitutes.

Tighter restrictions have been placed on local financial institutions that have foreign currency operations.

Chequebooks for foreign-currency accounts have been banned.

Foreign exchange bureaus have also been limited to exchanging a maximum of $10,000 - or the equivalent - in any one transaction.



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