MPC maintains policy rate at 14% for third consecutive meeting amid inflation risks

The Bank of Ghana’s Monetary Policy Committee (MPC) has maintained the policy rate at 14% for the third consecutive meeting, citing a broadly balanced outlook for inflation and economic growth.

The decision was taken unanimously at the Committee’s latest meeting, despite renewed global inflationary pressures and risks from higher crude oil prices, geopolitical tensions and disruptions to global supply chains.

Governor of the Bank of Ghana, Dr Johnson Asiama, said the Committee considered the resilience of the domestic economy and the moderation in underlying inflationary pressures in arriving at the decision.

“Based on these considerations, the Monetary Policy Committee viewed the balance of risks to inflation and growth broadly balanced, and the Committee voted by a unanimous decision to maintain the monetary policy rate at 14.0 percent,” he said.

The decision comes after headline inflation increased to 5% in August 2026, from 4.6% in July.

According to Dr Asiama, the increase was driven mainly by non-food inflation, which rose to 6.8% from 6.1%, partly due to the pass-through effects of utility tariff adjustments and elevated crude oil prices.

“Despite this, broad inflation expectations and core inflation measures eased, indicating a moderation in underlying inflation,” he said.

The Bank’s core inflation measure, which excludes energy and utility prices, eased slightly to 4.2% in August, from 4.3% in July.

The Governor said the inflation outlook remained subject to several upside risks, including further increases in utility tariffs, rising petroleum prices and their potential impact on transport fares, a stronger US dollar and possible spillovers from global supply-chain disruptions.

“On the other hand, continued fiscal consolidation, improved food supply conditions, and exchange rate stability, these present offsetting downside risks going forward,” Dr Asiama said.

The MPC also noted that economic activity had remained resilient during the first half of 2026.

Real GDP growth stood at 6% in the second quarter, supported mainly by the services and industry sectors, while private-sector credit growth rebounded strongly to 35.5% in August.

The average lending rate also declined to 15.9%, from 24.2% a year earlier, reflecting an easing in financing conditions.

However, the Bank cautioned that global developments could pose risks to Ghana’s economic outlook, particularly elevated crude oil prices, geopolitical tensions and tighter global financial conditions.