Monetary Policy
MPC Press Release - May 2009
Friday, 29 May 2009 00:00

The Ghanaian economy has not been immune to the contagion effects of the global crisis, even though the impact has been relatively limited in the first round, as the economy appears to be still experiencing high growth and the lingering effects of the large fiscal expansion in 2008 and high and volatile energy and food price developments in that year.


Headline inflation data for March 2009 as released by the Ghana Statistical Service (GSS) was 20.5 percent up from 20.3 percent in February and 19.9 percent in January 2009. This however, may be an early indication yet of a slowdown in the rate of inflation. During this period, non-food inflation pressures have been strong. While food inflation fell from 19.4 percent in January to 18.5 percent in March, non-food inflation increased from 20.2 percent to 22.0 percent, in part due to the strong pass-through from exchange rate depreciation to domestic prices.

The Bank’s measure of core inflation (defined to exclude energy and utility) increased from 13.9 percent in December 2008 to 19.3 percent in March 2009, though the rate of monthly increase indicates some slowdown.

There were relatively sharp movements in the exchange rate of the cedi against the three core currencies during the first quarter of the year, following similar movements in the fourth quarter of 2008. The cedi depreciated cumulatively by 13 percent against the dollar, 9.9 percent against the Pound Sterling, and 6.6 percent against the Euro. In year-on-year terms, the comparable depreciations were 0.8, 1.1 and 7.3 percents respectively against the three core currencies – the US dollar, the pound sterling, and the euro. The rate of depreciation declined somewhat in April, with reduced volatility observed in the exchange market.

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