Fitch Solutions predicts upside risks to Ghana’s interest rate expectations

Global research agency, Fitch Solutions has predicted some upside risks associated with Ghana’s interest rate projections.

In its latest article on Ghana titled, “More Interest Rate Cuts On The Way In Ghana, Following Cautious Start Of Easing Cycle”, the research arm cited an escalation in geopolitical tensions that could impact on global trade resulting in more hikes in global commodity prices.

Touching on Ghana’s position as a net importer of petroleum products and food items, Fitch Solutions noted that a surge in prices would further increase importation costs and disrupt the country’s disinflation process.

“There is also a risk that negotiations between Ghana and its commercial creditors will stall and take longer than we currently anticipate. This would delay IMF [International Monetary Fund] disbursements and weaken investor confidence, resulting in a sell-off of the cedi and a resurgence of inflation," the agency explained.

Fitch Solutions, however, pointed that these two scenarios would see the Bank of Ghana take a more conservative monetary easing approach than currently envisaged.

Meanwhile, the Bank of Ghana expects interest rates to broadly trend downwards and remain stable especially at the short-end of the yield curve.

Recent data from the Central Bank saw the 91-day and 182-day Treasury bill rates drop marginally to 29.49% and 31.70% respectively, in December 2023, from 35.48% and 36.23% respectively, in the corresponding period of 2022.

Similarly, the rate on the 364-day T-Bill instrument also declined to 32.97 percent in December 2023 from 36.06 percent in December 2022.2

MA/NOQ

Watch a recap of business stories below:



Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

Click here to follow the GhanaWeb Business WhatsApp channel