Ghana’s central bank has delivered its biggest-ever rate hike, increasing its monetary policy rate by 300 basis points to 22% as the bank battles to fight crippling inflation.
The hike comes just three weeks after the bank kept its rate unchanged at 19%, saying it was pausing to observe the impact of a series of record-breaking hikes.
Officials had been due to meet again in late September, but an emergency meeting was called as Ghana’s cedi currency continued its steep decline. The currency lost more than 6% against the dollar on Wednesday alone, with total losses for 2022 close to 39%.
Meanwhile, consumer inflation continued to rise, reaching 31.7% in July compared to one year earlier, the highest level since late 2003. The government’s top statistician recently warned it was impossible to say whether inflation had peaked.
The conditions have fueled unrest in the country. A large demonstration against price hikes was organized in Ghana’s capital Accra last month, whilst other spontaneous protests have broken out around the country as households struggle to afford essential items.