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ACCRA, May 22 (Reuters) - Ghana’s central bank lowered its benchmark interest rate on Monday by 100 basis points to 22.5 percent, citing a downward trend in inflation towards medium-term targets of 8 percent plus or minus 2 percentage points, Governor Ernest Addison said.
The cut, which economists had expected, reflected a lower threat of inflation despite a rise in the figure to 13.0 percent in April due to higher petroleum prices, Addison said.
“The committee judges that the downside risks to growth outweigh the upside risks to inflation,” he said after a Monetary Policy Committee meeting, addressing his first news conference since President Nana Akufo-Addo appointed him in March.
Fitch ratings agency upgraded Ghana’s outlook to stable on Friday and said it expected a revival of GDP growth and a decline in inflation and the budget deficit.
Ghana had one of Africa’s most dynamic economies due to its exports of gold, cocoa and oil until it was hit by a fall in oil prices and a fiscal crisis caused by government spending on civil service wages.
The country is now following a $918-million International Monetary Fund programme to restore fiscal balance. The programme is set to end in April 2018. (Reporting by Kwasi Kpodo; Writing by Matthew Mpoke Bigg; Editing by Nellie Peyton and Andrew Roche)