ACCRA, May 23 (Reuters) - Ghana's central bank on Monday raised its main interest rate by 200 basis points to 19% to curb inflationary pressures and promote macroeconomic stability, Governor Ernest Addison said.
In March the Bank of Ghana raised its policy rate by 250 basis points to 17% - the largest hike in its history - to stem runaway inflation in one of West Africa's more prosperous nations as the government cut spending to reduce the budget deficit and save a sliding local currency.
But in April the consumer inflation rate in the gold, oil and cocoa producer hit an 18-year high of 23.6%.
Addison said the total public debt stood at around 78% of gross domestic product.
Capital outflows have entirely offset a $1.3 billion trade surplus gained from a 61% jump in crude oil export revenues in the first quarter.
Addison said that had created an overall balance of payments deficit of $934.5 million in the first quarter compared with $429.9 million in the same period last year.
"The committee took the view that it needed to decisively address the current inflationary pressures to re-anchor expectations and help foster macroeconomic stability," Addison told a press briefing in the capital Accra.
The rapid depreciation of Ghana's cedi has slowed but the currency has still lost over a quarter of its value since the year began.
Although the jump in April inflation was mainly driven by transport costs, prices rose for more than 96% of surveyed items, meaning most Ghanaians are feeling the pinch.
Central bank forecasts show a "prolonged horizon" for inflation to return to its target band, Addison said.
Finance Minister Ken Ofori-Atta had said another hike would be a "knee-jerk reaction" to mostly imported inflation, making it hard for the government to service its domestic debt.
Ofori-Atta has committed to managing Ghana's debt without help from the International Monetary Fund.
Reporting by Christian Akorlie and Cooper Inveen; Editing by Sofia Christensen and Hugh Lawson
Source: Reuters