Fitch Solutions is forecasting upside risks to Ghana’s interest rate projections.

According to its latest article dubbed “More Interest Rate Cuts On The Way In Ghana, Following Cautious Start Of Easing Cycle”, it said an escalation in geopolitical tensions could disrupt global trade, leading to further increases in global commodity prices.

As Ghana is a net importer of both fuel and food items, it stated that such an increase would raise the cost of imports and disrupt the disinflation process.

“There is also a risk that negotiations between Ghana and its commercial creditors will stall and take longer than we currently anticipate. This would delay IMF [International Monetary Fund] disbursements and weaken investor confidence, resulting in a sell-off of the cedi and a resurgence of inflation”, it explained.

In both scenarios, it said the Bank of Ghana would embark on a more conservative monetary easing cycle than we currently forecast.

Interest rates remain broadly stable

According to the Bank of Ghana, interest rates broadly trended downward at the short end of the yield curve.

The 91-day and 182-day Treasury bill rates decreased to 29.49% and 31.70% respectively, in December 2023, from 35.48% and 36.23% respectively, in the corresponding period of 2022.

Similarly, the rate on the 364-day instrument decreased to 32.97 percent in December 2023 from 36.06 percent in December 2022.