By Maxwell Akalaare Adombila and Christian Akorlie
ACCRA (Reuters) -Ghana’s central bank on Monday held its main interest rate steady at 30% for the second meeting in a row to try to keep inflation falling from its current level above 35%.
The West African cocoa, gold and oil producer is negotiating a debt restructuring with its bilateral and commercial creditors to try to emerge from its worst economic crisis in a generation.
It has received the first tranche of an International Monetary Fund $3 billion lending programme and expects to get another after a meeting of the Fund’s executive board before the end of the year.
“There is a need to keep the policy rate tighter for longer until inflation is firmly anchored on a downward trajectory towards the medium-term target,” the Bank of Ghana said in a monetary policy statement.
Ghana’s inflation slowed for the third consecutive month in October to 35.2% year on year, down from 38.1% in September and 40.1% in August.
The central bank targets inflation of 8% with a margin of error of 2 percentage points either side.
As an additional measure, the bank said on Monday a new unified Cash Reserve Ratio for total deposits was being reset to 15% with effect from Nov. 30 to address excess liquidity and give added impetus to disinflation.
Bank of Ghana Governor Ernest Addison told a news conference that negotiations with bilateral creditors were progressing relatively well.
“If they (bilateral creditors) reach agreement early, by end of this year or first quarter next year, we will all be happy but if they don’t we will manage,” Addison said.
He said the issues faced by Zambia in its restructuring talks, with creditors disagreeing over who takes the biggest cut, created problems for the whole Common Framework, a G20-backed debt negotiation mechanism that Ghana is also using.
(Additional reporting by Rachel Savage; Writing by Anait Miridzhanian; Editing by Alexander Winning and Ed Osmond)