25 Feb 2009

Ghana raises prime rate to 5-year high

7:44 am on 25 February 2009

The Bank of Ghana raised its prime interest rate by 150 basis points to 18.5% on Tuesday to fight rising prices.

The rate is at its highest level since December 2003, but the next move is forecast to be down.

Annual inflation rose to 19.86% in January, but is expected to halve in 2009.

Bank of Ghana Governor Paul Acquah says the 2008 budget deficit is now reckoned at 14.9% of gross domestic product.

Gross international reserves fell to $US2 billion at the end of 2008 from $US2.8 billion a year earlier. Ghana issued a $US750 million debut Eurobond in 2007.