Finance Minister Seth Terkper is predicting that the significant drop in inflation is likely to force interest rate down in the coming days.
Inflation for the month of October 2016 declined from the 17.2% recorded in September to 15.8%.
According to figures released by the Ghana Statistical Service, inflation for the food and non-alcoholic beverages reached 8.7 percent.
But Finance Minister, Seth Terkper in a meeting with the media said pragmatic measures put in place by government over the period will see a further reduction in the inflation.
“With the drop in crude oil price and the fact that the market has taken shape, then the most important thing to watch is inflation. There is not so much pressure and we can only expect a reduction in interest rate,” he stated.
Meanwhile, Seth Terkper has defended government’s decision to raise a 438-million Ghana cedi bond at a rate of 19 per cent, explaining that interest on the 10-year loan is the second lowest in the history of such borrowings.
Apart from 2011, when stable macroeconomic conditions forced interest on a similar bond to drop to 18.5 per cent, Seth Terkper said, none of the bonds issued by the country had attracted rates lower than 20 per cent.
He said “When we issue treasury bills we don’t pay them until we settle paying back, which means we only settle and refinance. The 10 year bond will give time to settle”.
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