In remarks to Parliament’s Committee on Economy and Development, Bank of Ghana Governor Johnson Pandit Asiama reiterated a cautious monetary policy stance as inflation reached 5.5% in October, below the 6% to 10% target band. The Monetary Policy Committee had reduced its policy rate from 18% to 14% through cuts in January and March before holding it unchanged in May, July and September. Oil prices above USD 100 per barrel, exchange rate movements and domestic price pressures remain risks. Inflation is expected to enter the target band in coming quarters, depending on domestic and external price developments. Earlier monetary easing lowered borrowing costs and supported credit growth. The average lending rate fell from 27% in June 2025 to 15.6% in June 2026, while private sector credit growth reached 41.2% in June 2026. Real gross domestic product grew 6% in the second quarter. Banking sector asset quality also improved, with the nonperforming loans ratio declining from 23.1% in June 2025 to 15.7% in August 2026. The operational reforms reviewed included the replacement of the dynamic cash reserve ratio with a uniform 20% requirement held in domestic currency, effective June 4, 2026. Allowing banks to use part of their existing open market operation bill investments to meet the requirement reduced outstanding bills and the bank’s sterilization costs. The foreign exchange intervention framework, overhauled in 2025, uses advance notice of intervention windows and clearer intervention triggers. Reserve rebuilding remains a priority: gross international reserves recovered from USD 11.07 billion at the end of August to USD 12.05 billion, equivalent to 4.5 months of import cover, by Sept. 22, 2026. The Ghana Accelerated National Reserve Accumulation Programme, operational since April 2026, targets 15 months of import cover by 2028.

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