Ghana central bank reduces policy rate by 50 bps to 25.5 pct

Ghana's central bank reduced its main policy rate by 50 basis points on Monday to 25.5 percent, citing a better outlook for inflation and the need to boost growth, Governor Abdul-Nashiru Issahaku told a news conference.

"The outlook for inflation is broadly positive as reflected in the continued decline in underlying inflation (and) stability in the forex market .... Growth conditions remain weak and below trends," Issahaku said.
"With these considerations ... the committee concluded that the downside risks to growth outweigh the risk to inflation."
According to central bank figures, the interest rate reduction is the first since July 2011. The decision could help ease a longstanding concern of business leaders that the cost of borrowing is too high, thus stifling prospects for expansion.
Ghana's inflation rate has for years exceeded government targets and eased to 15.8 percent in October from 17.2 percent the previous month. A government decision to cut subsidies for utilities and fuel around a year ago is one factor that has kept inflation higher than expected this year.
That decision was taken in line with a $918 million International Monetary Fund programme that began in April 2015 and is designed to restore macro economic stability.

(C) Reuters News