Ghana’s central bank has kept its benchmark monetary policy rate unchanged at 14.0 percent, citing a broadly balanced inflation and growth outlook despite heightened global uncertainty driven by the Middle East conflict, Governor Johnson Pandit Asiama said on Tuesday.
The decision was announced at the Bank of Ghana’s 130th Monetary Policy Committee (MPC) meeting held from May 18 to 20, where policymakers reviewed recent economic developments and assessed risks to inflation, output and financial stability.
The Bank of Ghana (Bank of Ghana) said global conditions have deteriorated since March due to ongoing geopolitical tensions in the Middle East, which have disrupted maritime and air transport, pushed up energy prices and increased policy uncertainty worldwide.
The International Monetary Fund (International Monetary Fund) has revised down its 2026 global growth forecast to 3.1 percent from 3.3 percent, with further downgrades possible if the conflict persists, the governor noted.
He said disruptions linked to the Strait of Hormuz had triggered a sharp rise in crude oil prices, reigniting inflationary pressures in both advanced and emerging economies. Early indicators, he added, suggest global inflation is beginning to accelerate again, driven by higher energy and food prices and rising inflation expectations.
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“Resurgent inflation could prompt central banks to tighten policy further, pushing up global bond yields and tightening financing conditions,” Asiama said, warning that such developments could reverse capital flows to emerging markets.
Despite the external headwinds, Ghana’s domestic economy showed strong momentum in early 2026. The Composite Index of Economic Activity rose 12.6 percent year-on-year in March, compared with 2.3 percent a year earlier, driven by stronger credit growth, consumption, industrial output and trade activity.
However, business and consumer confidence softened slightly in April surveys, reflecting concerns about external risks, particularly the Middle East conflict.
Inflation edged up marginally to 3.4 percent in April from 3.2 percent in March, marking the first increase since late 2024. The rise was driven mainly by non-food inflation, while core inflation excluding energy and utilities declined, suggesting easing underlying price pressures.
The governor said inflation expectations remain broadly anchored within the medium-term target band, although they have ticked up slightly.
On the monetary side, reserve money growth slowed sharply to 3.6 percent in April from 38 percent a year earlier, while broad money growth also moderated. Treasury bill yields and lending rates have fallen significantly, reflecting easing inflation expectations and monetary policy tightening effects.
The 91-day Treasury bill rate dropped to 4.9 percent from 15.5 percent a year earlier, while average lending rates declined to 16.3 percent from 27.4 percent. Private sector credit growth rebounded strongly, expanding 28.7 percent in nominal terms.
Fiscal data showed improved performance in early 2026, with Ghana recording a surplus of 0.1 percent of GDP, compared with a targeted deficit of 1.2 percent. The primary balance also exceeded expectations.
The country’s debt stock rose to 674.1 billion cedis, representing 42.2 percent of GDP, but the debt-to-GDP ratio improved compared to December 2025 due to stronger output.
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The banking sector also showed significant strengthening. Total assets grew 26.6 percent year-on-year, while the capital adequacy ratio rose to 22.3 percent. Non-performing loans fell to 18 percent from 23.6 percent.
Externally, Ghana’s current account surplus improved to $3.1 billion in Q1 2026, supported by strong gold and cocoa exports and steady remittance inflows. Gross international reserves rose to $14.4 billion, covering 5.7 months of imports.
However, the cedi depreciated by 8.4 percent against the US dollar due to strong demand from the energy sector and corporate dividend payments.
Looking ahead, the MPC said inflation is expected to trend upward into the medium-term target band, driven by exchange rate effects, food supply pressures and transport costs. However, reserve buffers and fiscal discipline are expected to help contain risks.
The Committee maintained that risks to inflation and growth are broadly balanced and therefore decided to keep the policy rate unchanged.
It also announced an adjustment to the dynamic cash reserve ratio, setting a uniform 20 percent requirement effective June 4, 2026, as part of measures to strengthen liquidity management.
The next MPC meeting is scheduled for July 20–22, 2026, when policymakers will again review economic conditions and announce a new policy decision.
