Ghana's world-beating cedi tames inflation at eight-month low - Bloomberg

Ghana’s ostentation complaint fell to an eight-month debased successful April arsenic the West African nation’s world-beating currency helped rein successful import costs.

Consumer prices roseate 21.2% successful April, compared with 22.4% the period before, Government Statistician Alhassan Iddrisu told reporters successful the capital, Accra, connected Wednesday. Prices roseate 0.8% successful the month.

Non-food terms maturation decelerated to 17.9% from 18.7%, arsenic a rally successful the cedi reduced the outgo of imports. The currency has strengthened astir 16% against the dollar since the commencement of April, making it the world’s best-performing currency, according to information compiled by Bloomberg.

Food ostentation cooled to 25% from 26.5%.

The information is improbable to transportation the cardinal slope to little involvement rates aboriginal this month, arsenic it awaits further grounds of a slowdown successful price-growth aft its astonishment 100 basis-point summation successful March to 28%, said Agyapomaa Gyeke-Dako, a elder lecturer and economist astatine the University of Ghana Business School.

It tightened astatine its past gathering to “mop up immoderate excess liquidity, truthful present the cardinal slope enactment going guardant whitethorn not readily trim the monetary argumentation complaint yet due to the fact that determination mightiness inactive beryllium immoderate threats to ostentation coming from the hikes successful inferior prices,” she said earlier the information release.

The Bank of Ghana whitethorn besides beryllium reluctant to easiness argumentation arsenic “easier monetary conditions could rekindle inflationary pressures,” said Mark Bohlund, a elder recognition expert astatine REDD Intelligence.

Cuts whitethorn beryllium connected the skyline aboriginal successful the twelvemonth if the disinflation process continues. Governor Johnson Asiama said astatine the March gathering that arsenic the monetary authorization sees “the adjacent readings of ostentation and we spot declines, the committee volition reassess the scope for a gradual easing successful the argumentation stance.”

Price maturation successful the world’s second-largest cocoa grower has been supra 10% — the precocious bounds of the cardinal bank’s people set — since September 2021 arsenic a indebtedness situation led to a plunge successful the cedi, making imports much costly. The MPC expects ostentation to dilatory to astir 16% by the extremity of this twelvemonth and instrumentality to the 6%-10% set by the 2nd 4th of 2026.

The International Monetary Fund besides expects ostentation to dilatory further due to the fact that of the government’s pledge to curb rising surviving costs and enactment the cedi with fiscal adjustments.

“It makes america precise assured that ostentation is going to spell down successful the adjacent fewer months toward the programme objectives,” Stéphane Roudet, IMF’s ngo main to Ghana, said successful Washington successful April.