Central Bank Holds Key Interest Rate at 18.5%

Bank of Ghana left its benchmark lending rate unchanged as loans pledged by the World Bank and the International Monetary Fund halted a slump in the domestic currency, the cedi.

The prime rate was held at 18.5 percent, Bank of Ghana spokeswoman Esi Hammond said in a mobile phone text message from Accra today. The rate was last changed in February, when it was raised by 1.5 percentage points as the decline in the cedi pushed up import costs and inflation.

The IMF said last week that it would lend Ghana $1.02 billion to support the country’s balance of payments, the biggest loan to an African nation since the start of the global financial crisis. On June 30, the board of the World Bank agreed a $535 million loan to finance the budget deficit and tackle poverty.

The cedi has stabilized since the beginning of July after tumbling 15 percent against the dollar in the first six months of the year. The weaker currency pushed the inflation rate to 20.7 percent in June, the highest in at least four years.

Ghana, the world’s second-biggest cocoa producer next to neighboring Ivory Coast, is aiming to cut its budget deficit to 9.4 percent of gross domestic product this year from 14.9 percent last year. The government has forecast economic growth will slow to 5.9 percent from 7.3 percent.