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The Bank of Ghana has maintained its Monetary Policy Rate at 14%, citing rising external uncertainties and emerging inflationary pressures despite signs of continued improvement in the domestic economy.
The decision was announced at the conclusion of the Central Bank’s 130th Monetary Policy Committee (MPC) meeting held in Accra on Wednesday, May 20, 2026.
It follows two consecutive rate cuts by the Central Bank earlier this year.
The Committee noted that recent macroeconomic indicators point to improving economic stability, including easing inflationary trends, relative exchange rate stability, and stronger fiscal performance.
However, global economic conditions remain uncertain, with external developments posing potential risks to Ghana’s inflation outlook and overall economic recovery.
“Based on the above considerations, the committee assessed risks in the outlook to inflation and growth as broadly balanced and decided to maintain the monetary policy rate at 14.0%. The committee will continue to monitor incoming data, in particular relating to potential spillover of the geopolitical tensions to the domestic economy and take appropriate policy actions when necessary”, Governor Dr. Johnson Asiama said.
He also referenced the International Monetary Fund (IMF) downward revision of its 2026 global growth forecast to 3.1% from an earlier estimate of 3.3%.
For him, rising global inflation could compel major central banks to tighten monetary policy again, potentially reversing capital flows to emerging and developing economies.
“The disruption to trade flows following the blockade of the Strait of Hormuz has led to a sharp increase in international crude oil prices and reignited inflationary pressures in both advanced and emerging market economies,” Dr. Asiama stated.
According to the MPC, maintaining the policy rate at 14% is intended to sustain gains made in macroeconomic stabilisation while allowing the Bank to closely monitor evolving domestic and international risks.
Strong Domestic Recovery
Despite the challenging global environment, the MPC observed that Ghana’s domestic economy remained resilient during the first quarter of 2026.
The Bank’s Composite Index of Economic Activity (CIEA), which tracks high-frequency indicators of economic activity, expanded by 12.6% year-on-year in March 2026, compared to 2.3% during the same period in 2025.
According to the central bank, the growth was driven mainly by stronger private sector credit, increased consumption, industrial production, and international trade activities.
However, the committee noted that both business and consumer confidence softened slightly in April due to concerns over the potential domestic impact of the Middle East conflict.
Similarly, Ghana’s Purchasing Managers’ Index declined to 50.3% in April 2026 from 51.4% in March, mainly reflecting rising input costs.
Additional Measures
The committee decided to amend the dynamic cash reserve ratio to a uniform ratio of 20% maintained in the domestic currency effective June 4, 2026.
Story by Efua Nessa
Source :Loco tv