The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has maintained the Monetary Policy Rate (MPR) at 14 per cent, citing renewed global uncertainties and potential inflationary pressures from rising fuel and utility prices.
The decision, taken unanimously at the Committee’s 131st regular meeting in Accra yesterday, reflects a cautious stance aimed at preserving price stability while supporting economic growth.
Announcing the decision, the Governor of the BoG and Chairman of the MPC, Dr Johnson Pandit Asiama, said the current policy rate remained appropriate to guide inflation towards the Bank’s medium-term target band while allowing room to assess evolving global risks.
He noted that escalating tensions in the Middle East had disrupted energy markets, pushing crude oil prices above $85 per barrel and intensifying global inflationary pressures.
“These developments present upside risks to the inflation outlook, particularly through higher fuel and utility prices, and could tighten global financing conditions with implications for emerging economies such as Ghana,” he said.
On the domestic front, Dr Asiama indicated that the economy remained resilient, with real Gross Domestic Product (GDP) growth reaching 6.4 per cent in the first quarter of 2026, driven mainly by the services and industrial sectors.
He said the Bank’s Composite Index of Economic Activity recorded strong annual growth of 13.4 per cent in May 2026, supported by increased private sector credit, higher industrial output, improved trade performance and a rise in tourist arrivals.
Headline inflation, he said, rose to 5.3 per cent in June from 3.7 per cent in May, largely due to base effects and temporary increases in transport fares following higher global crude oil prices.
Despite the uptick, inflation remains below the Bank’s medium-term target range of 8 ± 2 per cent, with expectations broadly anchored.
Dr Asiama said monetary conditions had eased significantly over the past year, with the 91-day Treasury bill rate declining to 5.3 per cent from 14.7 per cent, while the Ghana Reference Rate dropped to 10 per cent from 23.8 per cent.
Average lending rates also fell to 15.6 per cent, contributing to a sharp increase in private sector credit growth of 41.2 per cent in June 2026.
He further noted that the banking sector remained robust, recording improved profitability, stronger capital buffers and better asset quality.
The Capital Adequacy Ratio increased to 20.4 per cent, while the Non-Performing Loans ratio declined to 16.1 per cent from 23.1 per cent a year earlier.
On the external front, Dr Asiama said Ghana’s trade and current account balances strengthened in the first half of the year, supported by strong gold and cocoa export earnings despite rising energy import costs.
Gross international reserves stood at US$12.9 billion at the end of June, equivalent to five months of import cover, providing a buffer against external shocks.
Looking ahead, he said the MPC expected inflation to gradually return to the target band but cautioned that geopolitical tensions and possible increases in utility tariffs posed upside risks.
Dr Asiama assured that the Committee would continue to monitor both domestic and global developments closely to ensure price stability while sustaining the country’s economic recovery.
The next MPC meeting is scheduled for September 22 to 24, 2026, with the policy decision to be announced on September 24.
BY KINGSLEY ASARE
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