- Decision
- Raise
- Rate change
- 100 bps
- monetary policy rate
- 28%
The Bank of Ghana’s Monetary Policy Committee raised the Monetary Policy Rate by 100 bp to 28.0 percent, citing still-high and sticky headline inflation of 23.1 percent in February, elevated core and food price pressures, and an expansionary 2024 fiscal stance that generated a liquidity overhang and risks to the disinflation path. After leaving the rate unchanged at 27.0 percent in January, the Committee now complements the hike with a new 273-day sterilisation bill, tighter monitoring of banks’ net open FX positions and a review of the cash-reserve-ratio structure to reinforce transmission. Inflation, though edging down from 23.8 percent in December, remains far above the 8 ± 2 percent medium-term goal, while 2024 real GDP growth accelerated to 5.7 percent and the CIEA rose 5.7 percent y/y in January amid a rebound in private-sector credit (26.9 percent y/y in February) and a banking sector CAR of 14.4 percent with falling NPLs. Robust gold-led export receipts lifted international reserves to USD 9.4 bn (4.2 months of imports) by February and helped slow the cedi’s depreciation to 5.3 percent against the USD by 26 March. The Committee noted that global tariff disputes, stalled disinflation in major economies and persistently restrictive financial conditions heighten external risks. It pledged to maintain a tight stance and strong liquidity management and said it will only consider “gradual easing” once inflation and expectations are firmly anchored.
Rate evolution
From July 2025 to March 2026, the Bank of Ghana cut the Monetary Policy Rate by 1,100 basis points from 25.0 percent to 14.0 percent, delivering a rapid easing cycle before pausing in May 2026 and maintaining that stance in July and September 2026. The cuts were initially driven by a sharp and broad-based disinflation, declining core inflation, anchored inflation expectations, cedi appreciation, strong fiscal consolidation and a marked strengthening in external buffers, while firming economic activity and high real interest rates gave the Committee scope to support recovery. As the cycle progressed, the Committee increasingly framed policy as shifting from restoring stability to consolidating macroeconomic gains, supporting real sector recovery, job creation and financial intermediation, even as it continued to flag risks from utility tariff adjustments, commodity-market volatility and global uncertainty.
After the final cut in March 2026, the Committee held at 14.0 percent in May and again in July, first judging risks to inflation and growth as broadly balanced because headline inflation remained below target, core pressures were still easing and domestic spillovers were muted, and later concluding that the current stance remained appropriate to guide inflation into the medium-term target band while allowing time to assess evolving geopolitical developments and their potential impact on the domestic economy. In July, it noted that headline inflation had risen to 5.3 percent in June from 3.7 percent in May, largely on base effects and a temporary increase in transport fares following higher crude oil prices, while core inflation and inflation expectations also increased but remained broadly within the target band, against a backdrop of stronger domestic growth, higher private sector credit growth, continued fiscal consolidation and adequate reserve buffers. In September, it unanimously maintained the rate at 14.0 percent and again judged risks to inflation and growth as broadly balanced, noting that headline inflation rose to 5.0 percent in August from 4.6 percent in July on utility tariff pass-through and high crude oil prices but remained below the lower bound of the medium-term target band, while core inflation and inflation expectations eased, growth remained resilient, and fiscal consolidation, improved food supply and exchange-rate stability presented offsetting downside risks.