BoG Cuts Policy Rate to 14% Amid Inflation Outlook Risks
The Bank of Ghana has reduced the Monetary Policy Rate by 150 basis point , bringing it to 14% from the previous 15.5% announced earlier this year.
Explaining the decision taken by the committee , The Governor said f the Bank of Ghana, Dr Johnson Pandit Asiama indicated that headline inflation is expected to remain within the medium-term target, despite growing external uncertainties.
“However, rising geopolitical tensions in the Middle East have deepened uncertainty in the external sector. The bank’s latest forecast suggested that headline inflation would remain within the medium-term target.”he explained
The Governor also added that the committee has taken notice of the potential risks that the country is likely to face as a result of the rising geopolitical tensions and external pressures but maintained that domestic conditions remain favourable with regards to reducing the policy rate.
“An upside risk to the inflation outlook includes the likely pass-through of higher crude oil prices and escalating geopolitical tensions. In the view of the Committee, despite these upside risks to the inflation profile, the favourable domestic macroeconomic conditions, and also the high prevailing real interest rates, these provide scope to ease the policy rate further. Consequently, the MPC decided to reduce the monetary policy rate by 150 basis points to 14 percent.”
The Committee stated that it will continue to monitor developments closely and come out with possible solutions in the next MPC meeting which is scheduled for May 18 to May 20 ,2026.
About The Author
