The Bank of Ghana (BoG) maintained its Monetary Policy Rate at 14 percent during its 130th Monetary Policy Committee (MPC) meeting, held from May 18 to 20, 2026. This decision reflects the central bank's assessment of balanced inflation risks and economic growth, even in the face of increasing global uncertainty. Policymakers cited escalating tensions in the Middle East as a significant external factor influencing their outlook.
The central bank stated that Ghana's internal inflation pressures remain low. However, global events continue to pose risks for the local economy. The MPC noted that the conflict in the Middle East has disrupted trade, increased global energy prices, and heightened policy uncertainty. These external factors led the International Monetary Fund (IMF) to lower its 2026 global growth forecast from 3.3 percent to 3.1 percent. The blockade of the Strait of Hormuz has especially contributed to sharp increases in international crude oil prices, renewing global inflation concerns.
This decision by the BoG comes within a broader context of steady economic performance in Ghana. The country's economy recorded strong growth in the first quarter of 2026. The Bank’s Composite Index of Economic Activity (CIEA) grew by 12.6 percent in March 2026, a significant increase from 2.3 percent during the same period last year. This growth was mainly due to stronger private sector credit, increased industrial production, higher consumption, and expanded international trade activities. These factors demonstrate underlying strength in the Ghanaian economy.
The Monetary Policy Committee announced its decision at the close of its meeting. According to the Committee, underlying inflationary pressures continue to ease, which is evident in the decline of core inflation. Inflation expectations among consumers, businesses, and financial institutions also remained largely within the central bank's medium-term target. This indicates confidence in the BoG's ability to manage prices despite global headwinds.
Looking ahead, the BoG anticipates that inflation will gradually rise towards its medium-term target range. This expected increase is due to movements in the exchange rate, changes in transport fares, and conditions affecting food supply. However, the central bank expects relative exchange rate stability and continued fiscal discipline to help control these potential risks. The BoG will also implement a new dynamic Cash Reserve Ratio, setting a uniform 20 percent requirement to be maintained in domestic currency, starting June 4, 2026. This measure aims to strengthen the financial system.
On the monetary front, the growth of reserve money slowed considerably to 3.6 percent in April 2026, down from 38 percent a year earlier. This slowdown reflects the impact of the central bank's tight monetary policy stance. Interest rates continued to fall, with the 91-day Treasury bill rate dropping to 4.9 percent in April 2026 from 15.5 percent a year prior. Average bank lending rates also decreased to 16.3 percent from 27.4 percent over the same period. Private sector credit showed strong nominal growth of 28.7 percent, translating to a real growth of 24.5 percent.
The banking sector also demonstrated improvements. The Capital Adequacy Ratio rose to 22.3 percent in April 2026 from 17.5 percent in the previous year. The Non-Performing Loan ratio decreased to 18 percent from 23.6 percent, indicating a healthier banking environment. In the external sector, Ghana’s current account surplus improved to US$3.10 billion in the first quarter of 2026, up from US$2.43 billion during the same period last year. This improvement was supported by strong gold and cocoa export earnings, along with stable remittance inflows. Gross International Reserves increased to US$14.4 billion, providing 5.7 months of import cover. However, the cedi depreciated by 8.4 percent against the US dollar by May 15, 2026, mainly due to increased demand for foreign exchange from the energy sector and corporate dividend payments. The next MPC meeting is scheduled for July 20 to 22, 2026.