The central bank on Friday raised its main interest rate by 100 basis points to 28%, saying the impact of the rate hike on consumer inflation will be reassessed before the next rate meeting in May.

The rate hike was unexpected by many observers.

A majority of economists polled by Reuters this week had forecast the central bank to hold rates steady, citing high inflation and forex weakness.

However, the bank carried out its first interest rate increase since July 2023, saying a tight stance was needed to lower inflation.

"The committee decided to raise the monetary policy rate by 100 basis points to 28%," new central bank governor Johnson Asiama said during a news conference, adding that the decision was taken by a majority of the members of the bank's monetary policy committee.

"While headline inflation has declined marginally, it remains a concern. Both food and non-food inflation are significantly above expectations, and core inflation remains elevated," he added.

Consumer price inflation slowed to 23.1% in February from 23.5% in January due to an easing in food and non-food prices. It remains well above the Bank of Ghana's targets of 8% with a margin of error of 2 percentage points.

"As inflation becomes firmly anchored... the committee will reassess the scope for a gradual easing in the policy stance," Asiama said.

At the opening of the five-day monetary policy committee meeting on Monday, his first since being appointed as the bank's new governor, Asiama said inflation was still uncomfortably high.

"This is a surprise move that suggests a more hawkish stance against inflation than has recently been apparent. I expect markets to find it reassuring, even though households and firms will be disappointed," said Leslie Dwight Mensah, economist and research fellow at the Institute for Fiscal Studies.

The gold, oil, and cocoa-producing West African nation is recovering from its most severe economic crisis in decades, facing challenges in its critical cocoa and gold industries.

Finance Minister Cassiel Ato Forson said during his budget speech this month that steep spending cuts would allow Ghana to drive down inflation to 11.9% by the end of the year.