BoG holds policy rate at 14%, citing global uncertainties and inflation risks

The Bank of Ghana (BoG) has decided to keep its Monetary Policy Rate (MPR) unchanged at 14 percent. This decision reflects a cautious approach aimed at maintaining price stability while supporting economic growth amid renewed global uncertainties and potential inflationary pressures. The Monetary Policy Committee (MPC) reached the unanimous decision at its 131st meeting in Accra.

Governor Dr. Johnson Pandit Asiama highlighted that escalating tensions in the Middle East have disrupted energy markets, pushing crude oil prices above $85 per barrel. These developments intensify global inflationary pressures, posing upside risks to Ghana's inflation outlook, particularly through higher fuel and utility costs. Such conditions could also tighten global financing, impacting emerging economies like Ghana.

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These developments present upside risks to the inflation outlook, particularly through higher fuel and utility prices, and could tighten global financing conditions with implications for emerging economies such as Ghana.

Domestically, the Ghanaian economy demonstrates resilience. Real Gross Domestic Product (GDP) growth reached 6.4 percent in the first quarter of 2026, primarily driven by the services and industrial sectors. The Composite Index of Economic Activity recorded strong annual growth of 13.4 percent in May 2026, supported by increased private sector credit, higher industrial output, improved trade performance, and a rise in tourist arrivals.

While headline inflation rose to 5.3 percent in June from 3.7 percent in May, largely due to base effects and temporary increases in transport fares, it remains below the Bank's medium-term target range of 8 ± 2 percent. Monetary conditions have eased significantly over the past year, with key interest rates declining substantially, contributing to a sharp increase in private sector credit growth. The banking sector also remains robust, showing improved profitability, stronger capital buffers, and better asset quality. Ghana's international reserves stand at $12.9 billion, providing a buffer against external shocks.

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The current policy rate remained appropriate to guide inflation towards the Bank’s medium-term target band while allowing room to assess evolving global risks.