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POLL-Ghana's central bank to hike rates to 18.75% to halt inflation

JOHANNESBURG, May 23 (Reuters) - The Bank of Ghana (BOG) will raise its prime lending rate again later on Monday, probably lifting it by 175 basis points to 18.75%, as authorities struggle to put the brakes on runaway inflation, a Reuters poll found. African central banks are feeling liquidity pressures and dollar scarcity as the U.S. Federal Reserve has raised its own rates, hitting nations with serious public debt problems while also undermining local currencies and fuelling runaway inflation. In a May 17-20 poll there was no clear majority among the 10 analysts surveyed with the median suggesting a hike by the BOG to 18.75%. Two respondents predicted an increase to 18.50%, two to 19.00%, two to 20.00%, one said to 19.50% while three said no change from 17.00%. Barclays economists wrote that they see the risk of yet another decisive hike at the Ghana's upcoming MPC meeting, given the monetary authorities' admission it was surprised by the sharp jump in CPI from an annual 19.4% in March to 23.6% in April. That April reading was the highest in almost two decades, making living standards ever harder in the West African country. Central bank authorities have been the most active on the continent and announced their biggest ever interest rate hike in March of 250 basis points to 17.00%. "Moreover, it is unlikely, in our view, that the MPC realistically continues to expect inflation to fall back into target within a year," Barclays added in its note. Prices of goods from flour to sugar to fuel in Ghana have been problematic while the cedi GHS= currency remains weak. The cedi has lost over a quarter of its value since the year began, now trading at 7/$ against a very strong dollar. There are other monetary policy meetings due to take place on the continent in coming days as well, with Governor Godwin Emefiele due to announce Nigeria's monetary policy rate on Tuesday. Ten of 12 analysts expected Nigeria to hold rates at 11.5%, while two expected a 50 basis-point hike to 12.0%. Despite quicker inflation at 16.82% in April for Nigeria, rising for a third straight month in Africa's biggest economy, analysts don't expect the central bank to hike rates this year because of general elections due early next year. Nigeria's National Bureau of Statistics is due to announce GDP data this week and the poll predicted Nigeria's growth rate to have slowed to 2.93% last quarter from 3.98% in the previous three months. The poll also suggested the central bank in Kenya, due to announce its benchmark rates at month end, will hold rates steady. Still, Virag Forizs of Capital economics wrote that African central banks are clearly not turning a blind eye to tightening global financial conditions, either. For example, South Africa's central bank last week increased its main lending rate by the largest margin in more than six years as it stepped up efforts to fight inflation, sending the rand higher. (Reporting by Vuyani Ndaba; Editing by Hugh Lawson) ((vuyani.ndaba@thomsonreuters.com; +27 11 775 3157;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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