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By Kwasi Kpodo and Matthew Mpoke Bigg
ACCRA (Reuters) - Ghana's central bank raised its main policy rate by 2 full percentage points to 18 percent on Thursday to curb a fall in the cedi currency and combat external pressures, Governor Henry Kofi Wampah told a news conference.
The decision failed to alleviate the concerns of some analysts. Fitch ratings agency said the currency's slide was a symptom of wider macro-economic problems in Ghana, a country with a reputation for strong growth and stable democracy.
It was the first time the Bank of Ghana has shifted its main rate since May. But analysts, who had expected the rate hike, saw it as a necessary but insufficient step in the right direction given the country's fiscal problems.
Ghana is following in the footsteps of bigger emerging markets India, Turkey and South Africa, all of whom raised borrowing costs in January to support their currencies after the U.S. Federal Reserve's decision to begin rolling back its bond buying shook emerging markets.
The West African state's growth is based on exports of gold, oil and cocoa, but import-led demand for dollars has punished the cedi.
Thomson Reuters data shows the currency depreciated nearly 20 percent in 2013 and has weakened a further 4.7 percent so far this year.
The central bank was also under pressure to act because of inflation, which hit a three-year high of 13.5 percent in December.
"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 macroeconomic stability," Wampah said after an emergency meeting of the Monetary Policy Committee.
Wampah announced a series of measures on Wednesday to tighten foreign exchange controls.
An "initial forecast" showed that, without those measures, Ghana would miss its 11.5 percent upper target for inflation in 2014 to land at 12 percent, he said.
"What we are trying to do with these policies ... is to really make those cedi assets more attractive and therefore instead of going to buy dollars you will rather buy treasury bills, Bank of Ghana bills and so on," he said.
The Bank also wanted to stop a burgeoning black market and the pricing of local transactions in dollars. Payment in dollars is becoming more common for rent and in other areas as people seek shelter from the falling cedi.
More broadly, he said the government should broaden its tax and export base and consider renegotiating stabilization agreements with exporters.
Some economists said the fall in the currency stemmed from fiscal problems that the government has done too little to correct, noting low import cover and a deficit that is provisionally expected to stand at 10.2 percent for 2013.
"Fitch's concerns about Ghana's macro economic imbalances are growing. You are starting to see the repercussions of loose fiscal policy .... The current policy mix won't do anything to right this situation," Carmen Altenkirch, director of Fitch's sovereign group, told Reuters.
Fitch downgraded Ghana in October to a 'B' rating with a stable outlook, saying the government was overspending.
Morgan Stanley said in a research note the Bank's measures were drastic and might not halt a slide in the currency, which it said is caused mainly by an imbalance of payments made worse by fiscal policies.
Melissa Verreynne, an economist at NKC Independent Economists in South Africa, said she was pleased the bank had gone for a relatively large increase.
"Bold action is needed to prove to investors and traders that the central bank is serious about addressing the impact of the weakening cedi," she said.
Yvonne Mhango, an analyst with Renaissance Capital in South Africa, said she did not expect the impact of the rate decision on the currency to be significant as long as the country's deficits remain large.
(Writing by Matthew Mpoke Bigg; Editing by Jeremy Gaunt and Hugh Lawson)