Ghana's central bank has decided to maintain its interest rate at 27% for the second consecutive month, as the country's new administration settles in and attempts to mitigate inflationary pressures. This decision was taken in anticipation of price pressures decreasing, as the new administration tightens fiscal policy.

The governor of the country's central bank, Ernest Addison, informed reporters during a press briefing in the capital, Accra, on Monday that the monetary policy committee maintained the rate at 27%. Addison attributed the elevated inflation profile to high food prices, which he blamed on adverse weather and supply-chain weaknesses.

The new administration, led by President John Mahama, has appointed Cassiel Ato Forson as the new finance minister. Forson is expected to unveil his first budget by the end of March, which is highly anticipated to have a significant impact on the trajectory of Ghana's inflation. According to Bloomberg, the country's currency, the Cedi, has lost almost 3.5% of its value versus the dollar since the year began, and inflation accelerated to an eight-month high of 23.8% in December.

Despite the current challenges, the Bank of Ghana estimates that the incoming administration will have a significant impact on inflation, with the consumer price index expected to dip to single digits by the second quarter of 2026. However, this projection is contingent on the economic policy agenda, which is yet to be crafted. The new finance minister emphasized that the focus will be on expenditure, rather than just revenue, stating that "it shouldn't always be about revenue, we will be paying attention to expenditure."

This development is crucial for Ghana's economy, as the country navigates the challenges of inflation and currency fluctuations. The decision to maintain the interest rate suggests that the central bank is taking a cautious approach, anticipating that the new administration's fiscal policy will help decrease price pressures and initiate a disinflation process. As the country awaits the unveiling of the new budget, the implications of this decision will be closely watched by economists and investors alike.

In conclusion, Ghana's decision to maintain its interest rate amidst inflationary pressures and a new administration is a significant development in the country's economic landscape. As the country navigates these challenges, the impact of the new administration's fiscal policy and the upcoming budget will be crucial in shaping the trajectory of Ghana's economy.