March 26, 2018 / 12:43 PM / a year ago

UPDATE 1-Ghana central bank cuts policy rate to 18 pct

(Adds quotes, details)

ACCRA, March 26 (Reuters) - Ghana’s central bank cut its benchmark interest rate by 200 basis points to 18 percent on Monday, saying its medium-term inflation target was on course, Governor Ernest Addison told a news conference in the capital Accra.

Ghana is in its final year of a $918 million credit deal with the International Monetary Fund to narrow deficit, debt and inflation. Monday’s cut adds to 750 basis points by the regulator in the past year to also foster growth.

The regulator had forecast consumer inflation to ease to 8 percent, plus or minus two percentage points by the second quarter of 2018. Annual inflation stood at 10.6 percent in February.

“The committee noted that the current inflation forecast provides scope for monetary policy to realign interest rates, translate the disinflation gains achieved so far to the market, and reinforce fiscal consolidation process by easing the burden of interest payments on the budget,” Addison said.

The major commodity exporter’s public debt stood at $32.5 billion at end of December, representing 69.8 percent of GDP, while its gross international reserves amounted to $6.9 billion or 3.8 months of imports cover at the end of February.

The central bank last week appointed accounting firm KPMG as administrator for Unibank to save it from imminent collapse and prevent depositors’ funds.{nL8N1R2692].

Addison told reporters on Monday the administrator was assessing the distressed bank’s books adding that the move would further boost credibility and confidence in Ghana’s financial sector. (Reporting by Kwasi Kpodo; editing by Richard Balmforth)

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