The Bank of Ghana’s Monetary Policy Committee (MPC) on Wednesday, July 22, 2026 unanimously decided to retain its benchmark Monetary Policy Rate (MPR) at 14 percent, the second consecutive time it has opted to do so, following a similar decision at its previous meeting in May. The last time it cut the MPR was in March when it slashed 150 basis points off its hitherto 15.5 percent, which marked the final phase of aggressive monetary easing which saw the MPR cut from 28 percent in July 2025 over five consecutive MPC meetings.
The latest decision to maintain the pause on further monetary easing was almost universally expected by economists, monetary policy analysts and public policy commentators, including the financial media. The Bank of Ghana’s primary objective is to curb inflation which has risen for the part three monthly readings from a trough of 3.2 percent in March this year to 5.3 percent in June. This has reversed a continuous sharp decline in headline inflation from around 15 percent at the start of 2025.
On the other hand economic growth – the central bank’s other primary objective – remained resilient in the first quarter of 2026. Real GDP growth was 6.4 percent, driven by the services and industry sectors, compared with 6.2 percent growth recorded in the same quarter of 2025. The Bank’s Composite Index of Economic Activity (CIEA), which tracks high frequency real sector indicators, pointed to a sustained increase in economic activity. The CIEA recorded annual growth of 13.4 percent in May 2026 compared with 4.4 percent in May 2025. Credit to the private sector, international trade activities, industrial production, and tourist arrivals, all contributed to the improved economic performance during the period. The latest confidence surveys, conducted in June 2026 showed positive consumer and business sentiments, supported by optimism about growth prospects, subdued inflation, and declining lending rates.
Explained Bank of Ghana Governor, Dr Johnson Pandit Asiama – who doubles as the Chairman of the seven person MPC – when announcing the Committee’s latest decision on Wednesday, “The Committee judged that the current policy stance remains appropriate to guide inflation into the medium-term target band, while allowing time to assess the evolving geopolitical developments and allowing time to assess the evolving geopolitical developments and their potential impact on the domestic economy.”
Dr Asiama ascribed the resurgence of headline inflation (which has impacted both food and non-food inflation) to base drift effects and a temporary increase in transport fares, following the surge in crude oil prices experienced during the period. However he noted that while survey based inflation expectations among consumers, businesses, and the banking sector rose broadly, they remained anchored within the central bank’s target band of between 6 and 10 percent.
In arriving at its decision to retain the MPR at 14 percent the MPC balanced upside and downside risks to the economy.
Upside risks identified and considered by the MPC included the potential for increases in utility tariffs, the renewed political tensions and military conflicts in the Middle East, and their effects on crude oil price and wider shipping costs. Indeed Brent crude oil has risen to as high as US$95 per barrel, after falling to close to US$70 less than a fortnight ago in the wake of the short-lived truce between the United States and Iran.
On the downside however, the MPC has considered that continued fiscal consolidation, strong gross international reserves and an appropriately calibrated monetary policy stance should help moderate these risks
The Committee judged that the current policy stance remains appropriate to guide inflation into the medium-term target band, while allowing time to assess the evolving geopolitical developments and allowing time to assess the evolving geopolitical developments and their potential impact on the domestic economy.
The MPC will meet next from 22 – 24 September 2026. The meeting will conclude on 24 September 2026, with the announcement of the policy decision.
By: Toma Imirhe / businesspostonline
