BoG Holds Cautious Policy Line to Safeguard Gains on Inflation

The Bank of Ghana says it will keep a careful approach to monetary policy as it seeks to protect recent progress on inflation, which has started edging upwards again.

Governor Dr Johnson Asiama told Parliament's Committee on Economy and Development on Friday, November 6, that the central bank's decision to halt further easing was meant to keep inflation on a downward path without leaving the economy vulnerable to fresh price increases, as first reported by Citi News.

Looking back on the year, Dr Asiama said: "The first half of 2026 was a period of consolidation." He explained that the Bank had cut rates further as inflation eased, but stopped once risks began to build both at home and abroad.

According to the Governor, this approach has helped sustain economic growth, bring down interest rates and boost lending to the private sector. He also pointed to better external balances and said the banking sector had stayed resilient.

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Policy rate unchanged

The Monetary Policy Committee (MPC) kept the policy rate at 14 per cent from May through to September 2026. At the September meeting, most committee members pointed to external risks and worries about inflation picking up as the main reasons for holding the rate.

"The subsequent developments have reinforced the importance of maintaining a cautious and data-dependent policy stance," Dr Asiama told the committee.

Inflation rising again

Inflation went up for the third month running in October 2026, reaching 5.5 per cent. The figure was 5.2 per cent in September, and 9.4 per cent in October last year.

October's reading is the highest recorded in 11 months, though it still sits below the Bank's medium-term target band of 6 to 10 per cent.

Dr Asiama named swings in global oil prices, movements in the exchange rate and adjustments to domestic prices as factors that could make the inflation outlook harder to manage.

He said the Bank would watch these trends closely and act where needed to keep prices stable.

The Governor added that the central bank would continue work to strengthen the operational and institutional base of monetary policy. He listed improved liquidity management, a transparent foreign exchange framework, building up reserves, and reforms aimed at restoring the Bank's own financial position.