Rate Cut To Be Reversed

BMI View: The Bank of Ghana's decision to cut interest rates by 50 basis points to 12.50% signals a benign view on inflation, but we believe this is somewhat misplaced. Moreover, the broad picture for the economy is very positive, and additional rate cuts risk over-stimulation. Although price pressures may stay subdued over the short term, we see inflation moving back into double-digit territory by year-end, likely prompting an interest rate hike.

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