Ghana's central bank raised its main policy rate by 200 basis points on Thursday to 18 percent in a drive to curb a fall in the cedi currency amid external pressures, Governor Henry Kofi Wampah told a news conference.
The rise was the first shift in the rate since May and had been expected, though most analysts forecast a 100 basis point rise. Wampah had brought forward the Bank's Monetary Policy Committee meeting from Feb 19.
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Ghana's strong growth is based on exports of gold, oil and cocoa but import-led demand for dollars caused the cedi currency to depreciate nearly 20 percent in 2013 and 4.7 percent so far this year, according to Thomson Reuters data.
"The uncertainties in the outlook and weakened domestic fundamentals underscored the need for continued tight fiscal and monetary policies and measures that will reduce the country's vulnerability to shocks, re-anchor inflation expectations and sustain macro economic stability," Wampah said.
"These informed the decision to increase the policy rate by 200 basis points," Wampah said.
The Bank of Ghana was also under pressure to act because of inflation, which in December hit a three-year high of 13.5 percent in a country viewed as one of Africa's brightest prospects because of its stable democracy and high GDP growth.
Its action follows India, Turkey and South Africa, which all increased borrowing costs in January to support their currencies.
A decision by the U.S. Federal Reserve to roll back its bond buying has shaken emerging markets, which have been supported by the Fed stimulus in recent years. (Writing by Matthew Mpoke Bigg; Editing by Daniel Flynn)