Fitch Solutions predicts potential upward risks to Ghana's interest rate outlook, pointing to geopolitical tensions and disruptions in global trade that may result in higher commodity prices.

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In their recent article titled "More Interest Rate Cuts On The Way In Ghana, Following Cautious Start Of Easing Cycle," they suggest that Ghana, being a net importer of fuel and food items, could face increased import costs, which could disrupt the disinflation process.

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The report underscores the risk of stalled negotiations between Ghana and its commercial creditors, which could potentially delay International Monetary Fund (IMF) disbursements and undermine investor confidence.Such a scenario could lead to a sell-off of the cedi and a resurgence of inflation, prompting the Bank of Ghana to adopt a more conservative monetary easing cycle than initially anticipated.

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Despite these concerns, interest rates in Ghana have generally remained stable. According to the Bank of Ghana, there has been a downward trend in rates at the short end of the yield curve.In December 2023, the 91-day and 182-day Treasury bill rates decreased to 29.49% and 31.70%, respectively, compared to 35.48% and 36.23% in the corresponding period of 2022. Similarly, the rate on the 364-day instrument decreased to 32.

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97% in December 2023 from 36.06% in December 2022.

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