BoG Maintains Cautious Monetary Stance Amid Emerging Inflation Risks

The Bank of Ghana (BoG) says it is maintaining a cautious monetary policy stance to consolidate gains made in reducing inflation while guarding against emerging domestic and external risks.

Governor Dr Johnson Asiama said the decision to pause monetary policy easing was necessary to sustain the progress in disinflation without exposing the economy to renewed price pressures.

Addressing Parliament's Committee on Economy and Development on Friday, November 6, Dr Asiama said the first half of 2026 had been a period of consolidation.

“The first half of 2026 was a period of consolidation. We achieved further monetary policy easing as inflation declined but appropriately paused when external and domestic risks began to emerge,” he said.

According to the Governor, the policy approach has supported continued economic growth, lower interest rates, stronger private sector credit growth, improved external balances, and a resilient banking sector.

The Bank's cautious position was reflected in the Monetary Policy Committee's decision to maintain the policy rate at 14 per cent between May and September 2026.

At its September meeting, a majority of MPC members cited external uncertainties and concerns about rising inflation as key reasons for keeping the rate unchanged.

“Subsequent developments have reinforced the importance of maintaining a cautious and data-dependent policy stance,” Dr Asiama noted.

Inflation increased for the third consecutive month to 5.5 per cent in October 2026, up from 5.2 per cent in September, though significantly lower than the 9.4 per cent recorded in October 2025.

While the latest figure is the highest in 11 months, it remains below the Bank's medium-term target range of 6 to 10 per cent.

Dr Asiama identified global oil price movements, exchange rate fluctuations, and domestic price adjustments as key risks to the inflation outlook.

“The Bank will monitor these developments closely and take the necessary policy actions to safeguard price stability.

“We also remain committed to strengthening the operational and institutional foundations of monetary policy through more effective liquidity management, a transparent foreign exchange framework, reserve accumulation, and reforms to restore the Bank's financial position,” he added.