- Decision
- Maintain
- Rate change
- 0 bps
- monetary policy rate
- 14%
The Monetary Policy Committee of the Bank of Ghana kept the Monetary Policy Rate at 14.0 % on 20 May 2026, judging risks to inflation and growth as “broadly balanced” amid still-subdued core price pressures, a marginal uptick in headline inflation to 3.4 % in April (from 3.2 % in March) and firm economic activity. This pause follows cumulative easing of 750 bp since September 2025, when the rate stood at 21.5 %. To reinforce liquidity management, the central bank will replace the current dynamic Cash Reserve Ratio with a uniform 20 % requirement in domestic currency from 4 June 2026. The Composite Index of Economic Activity expanded 12.6 % y/y in March, private-sector credit rebounded by 28.7 % y/y in April and the fiscal balance posted a small 0.1 %-of-GDP surplus in Q1. Externally, the current-account surplus widened to USD 3.10 bn in Q1, while gross reserves rose to USD 14.4 bn (5.7 months of import cover); the cedi has nonetheless weakened 8.4 % against the USD year-to-15 May on energy-sector demand and dividend outflows. The Committee highlighted that Middle East conflict-related oil price spikes and global policy tightening could lift imported inflation, but expects exchange-rate stability, larger reserves and fiscal discipline to temper pressures. It pledged to keep monitoring geopolitical spillovers and stands ready to adjust policy as needed.
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.