Bank governor Kwesi Amissah-Arthur told reporters,“Given the balance of risks to prices and output growth and recognition of the improved economic environment, the Monetary Policy Committee has decided to reduce the policy rate by 50 basis points to 13 per cent...Our current baseline forecast for the next 12 months suggests that inflation will remain close to nine per cent on a year-on-year basis”.
Amissah-Arthur said that the Bank's index of economic activity grew by 23.7 per cent year-on-year for the first quarter of this year compared to year-on-year growth of 9.1 per cent in the last quarter of 2010, though consumer confidence remains low because of concern over fuel and utility prices.
Standard Chartered Bank analyst Razia Khan says that the cut “may provide a small, albeit short-term boost to Ghanaian fixed income” but that “ it is difficult to see the justification for a sustained easing cycle...In the absence of more long-dated issuance, extending the maturity of the domestic curve, the Ghana cedi is unlikely to gain substantially as a result ,” she said.
Amissah-Arthur has also announced that Ghana's total exports increased 62 per cent to US$3 billion (GH¢4.5 billion) in the first quarter of 2011 which were boosted by oil shipments.
Oil exports were worth US$484.2 million (GH¢727.7 million), earnings from cocoa rose 26 per cent to US$859.4 million (GH¢1.291 billion), and gold shipments increased from US$787 million (GH¢1.182 billion) to US$1.2 billion (GH¢1.8 billion), he told reporters in Accra. The higher exports helped cut the country's current account deficit from US$565.8 million (GH¢850.4 million) this time last year to US$220.2 million (GH¢330.9 million), he said.
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© 2011 Menas Associates
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