Ghana Pauses Monetary Easing Cycle

The Bank of Ghana left its benchmark interest unchanged at 14% in its May 2026 meeting, pausing after five consecutive rate cuts. Policymakers said the decision reflected a cautious but supportive stance designed to anchor inflation expectations while also supporting economic activity. Governor Johnson Asiama noted that the Middle East conflict had “stoked inflationary concerns and underlined policy uncertainty, with potential implications for the domestic economy.” Ghana’s annual inflation rate inched up to a three-month high of 3.4% in April, from 3.2% in March, but remained subdued overall.

The Bank of Ghana cut its benchmark interest rate by 150bps to 14% in its March 2026 decision, a fifth consecutive rate cut to mark the loose return to borrowing costs from the period before the Russian invasion of Ukraine triggered a global inflation shock. The cut contrasted slightly with the market consensus of a softer 100bps cut, reflecting policymakers' greater priority of addressing growth concerns despite upside risks to inflation. Headline inflation recently slowed to a 25-year low of 3.3% in February, but base effects and a surge in global energy prices triggered by the war in the Persian Gulf are likely to trigger some traction in price growth. On the other hand, the surge in gold prices last year increased the foreign exchange influx into Ghana, limiting the pressure that the Central Bank faces to defend the cedi and adding some leeway for lower policy rates.

The Bank of Ghana cut its policy rate by 250 basis points to 15.5% at its first meeting of 2026, taking borrowing costs to their lowest level since February 2022. Governor Johnson Asiama said headline inflation is expected to move close to the medium-term target of 8.0%, while economic growth is projected to remain strong in 2026. Ghana’s inflation rate fell to 5.4% in December, its lowest since July 2022, marking the 12th straight month of disinflation. The central bank said it will continue to monitor developments closely and take appropriate policy action to ensure that the gains from macroeconomic stability translate into sustainable growth.