This adds up to the 550 basis points increase since November 2021 to tighten liquidity and tame inflation.

The Central Bank also increased the primary reserve requirement of banks from 12 per cent to 15 per cent to be implemented in a phased manner, that is 13 percent from September 1, 2022; 14 per cent by October 1, 2022, and 15 percent by November 1, 2022, in a bid to mop up excess liquidity.

The decision comes after an extraordinary MPC meeting held to review recent developments in the economy and assess risks to the outlook.

The Committee examined the increase in inflation in the month of July and heightened pressures in foreign exchange market and deliberated on the underlying drivers.

Headline inflation accelerated further for the eleventh consecutive month to 31.7 percent in July 2022, from 29.8 percent in June 2022, driven by both food and non-food price pressures.

Food inflation rose to 32.3 percent in July 2022 from 30.7 percent in June 2022. Similarly, non-food inflation increased to 31.3 percent from 29.1 percent in June 2022, contributing 55 percent to the rise in headline inflation in July 2022.

"The above developments have translated into relatively strong underlying inflationary pressures," the Committee said in a statement after the meeting.

The committee noted that recent developments in the foreign exchange market showed elevated demand pressures, reflecting among others, continued heightening of uncertainties in the global economy, rising inflation in many advanced economies and the resultant coordinated tightening of monetary policy stance by major central banks.

This has further tightened global financing conditions with significant implications for Emerging Markets and Developing Economies (EMDES), especially for those with weak fundamentals.

The Ghana Cedi has depreciated by 25.5 percent year-to-date, reflecting the Ghana specific situation, including the challenging financing of the budget from both domestic and external sources, downgrading of sovereign credit rating, non-residents disinvestment in local currency bonds, and loss of reserve buffers.

To boost the supply of foreign exchange to the economy, the Bank of Ghana is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.

"This will strengthen the central bank's foreign exchange auctions," it said.

The committee noted that the execution of the budget for the year has remained challenging.

"Revenue has not kept pace with projections and created financing challenges. In the absence of access to the international capital market and given the constrained domestic financing, central bank overdraft has helped to close the financing gap as reflected in the mid-year budget review," the statement said.

The statement said the Bank of Ghana was working with the Ministry of Finance to agree on a cap on the overdraft and expressed the hope that the ongoing policy discussions with the IMF would address the underlying macroeconomic challenges, restore fiscal and debt sustainability, and provide sustainable balance of payments cushion.