Fitch Solutions forecasts that the Bank of Ghana (BoG) will start to lower its policy rate in the last quarter of 2023, reducing it by 2 percentage points (pp) to 27.50% by the end of 2023.
The reason for this is that inflation will keep on declining in the next few months. “We project that the BoG will begin a monetary easing cycle in Q423, trimming the policy rate by 2pp to 27.50% by end-2023.
The annual growth rate of consumer prices will continue to drop through H223 [2 half of 2023] due to a stable exchange rate and high base effects, likely falling below the central bank’s end-2023 inflation target of 29.0% around September-October ”.
“Indeed, we estimate that inflation will decrease to 20.2% by end-2023. This will make real interest rates positive again in Q423, allowing policymakers to adopt a more dovish stance”, it added in its latest article on Ghana.