Bank loans – Ghana’s Central Bank on Friday cut the prime rate by 50 basis points to 18 per cent.

The Monetary Policy Committee (MPC) said it took the decision because of signs of stabilization in prices and strong performance of the cedi (local currency) ag a inst major trading currencies.

‘The monetary and fiscal policy framework is working and gradually placing the economy back on a path of disinflation. There are signs of stabilization in prices and the foreign exchange market,’ Mr Kwesi Amissah-Arthur, Governor of the Bank of Ghana and Chairman of the MPC, told a press conference after a meeting of the Committee.

‘Inflation is trending downwards and consumer price inflation has recorded four consecutive declines while core inflation is also on the decline,’ he added.

The MPC undertook a review of the macroeconomic situation against the background of developments in the global economy, assessment of the pace of domestic economic growth, the execution of the 2009 budget and the outlook for inflation.

Mr Amissah-Arthur said indications were that inflation would continue to ease and fall within the upper part of the target range of 14.5 -17.5 per cent by the end of December 2009.

‘Looking ahead, inflation is likely to return to the target range of 7-11 per cent by the end of December 2010,’ he said.

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