Ghana’s central bank hiked interest rates again by 2.5% on Monday in the fight against skyrocketing inflation in the country. The interest rate at which banks can borrow money from the central bank is now 27%. This interest is usually passed on to consumers by regular banks.
Ghana, which exports a lot of cocoa, gold and oil and has one of the largest economies in West Africa, is currently experiencing its biggest economic crisis in recent times. In October, inflation in the African country was 40.4 percent. This was the highest percentage in 21 years.
This year alone, the value of the Ghanaian cedi, the currency used for payments in the country, has lost more than 50% against the dollar. This makes it much more expensive for Ghanaians to import products from abroad.
At the presentation of the 2023 budget last week, Ghana’s finance minister promised new measures to reduce spending and increase the country’s revenue. The country’s government is negotiating an aid package with the International Monetary Fund.