The Bank of Ghana is expected to maintain its benchmark policy rate at 14 per cent when the Monetary Policy Committee (MPC) concludes its September meeting on Thursday, September 24, 2026, according to market research firm IC Insights, as policymakers weigh a resilient domestic economy against renewed inflationary pressures driven by external shocks.
IC Insights said the real policy rate of 9.0 per cent suggests room for a modest cut if external risk events were less volatile, but the MPC is likely to preserve policy headroom to accommodate any unexpected spike in inflation without a need for a near-term hike.
“We, however, believe the 91-day yield has reached a trough and will require upward repricing to restore positive real yield,” the research firm explained.
The projection places IC Insights at odds with Databank Research, which has forecast a 150-basis-point cut to 12.5 per cent, citing the continued correction in inflation towards the central bank’s medium-term target band of 8 per cent ±2 per cent.
“Despite external shocks, monetary policy in 1H’26 remained on a cautious easing path, with our expectation of two rate cuts for the year still intact following the first reduction in March 2026, which lowered the policy rate to 14.0 per cent,” Databank said.
The divergence between the two research houses underscores the delicate balancing act facing the MPC as it navigates competing signals from inflation, exchange rate pressures and global market volatility.
The July Hold
At its 131st MPC meetings held from July 20 to 22, 2026, the Committee unanimously voted to keep the Monetary Policy Rate at 14.0 per cent, pausing after five consecutive rate cuts. The central bank had reduced the rate by 150 basis points to 14 per cent in March 2026, bringing cumulative cuts to 1,400 basis points since the easing cycle began in July 2025.
Bank of Ghana Governor Dr. Johnson Asiama, who chaired the Committee, said recent inflation developments remained broadly in line with forecasts, although headline inflation increased in June due mainly to temporary factors. According to the MPC, inflation had edged closer to the lower bound of the Bank’s medium-term target range, driven largely by base effects. While inflation expectations and core inflation had risen, they remained broadly anchored within the target band.
The Committee cited heightened uncertainty stemming from the Middle East conflict and its attendant rising energy prices and renewed global inflationary pressures as risks to the inflation outlook and medium-term growth prospects. These developments warranted a cautious policy stance, the MPC said.
Inflation: From 3.2% to 5.0%
Ghana’s disinflation trajectory has reversed sharply since March 2026, when inflation fell to 3.2 per cent — the lowest level in about three decades since August 1999. The rate climbed to 3.4 per cent in April, 3.7 per cent in May and 5.3 per cent in June before easing to 4.6 per cent in July and rising again to 5.0 per cent in August 2026.
The August increase was driven primarily by non-food price growth, which picked up to 6.8 per cent from 6.1 per cent in July, reflecting renewed pressures from energy, transport and imported inputs. Food and non-alcoholic beverages inflation, which had decelerated to 2.3 per cent in March, has also been on an upward path.
The reversal followed 15 consecutive months of declining inflation, the longest period of falling prices since the 2021 rebasing of the Consumer Price Index. The turnaround has been attributed to the pass-through effects of the Middle East conflict on global energy and fertiliser costs, as well as domestic food supply constraints and base effects.
The MPC acknowledged in July that near-term forecasts suggested inflation could rise further in July and August before stabilising, with the baseline projection indicating a return to the target band thereafter.
Treasury Bill Yields and Market Pricing
Treasury bill yields have fallen sharply in response to the central bank’s easing cycle and strong market liquidity. At the most recent auction on September 7, the 91-day bill yield declined by 14 basis points to 4.80 per cent, from 4.94 per cent at the previous auction. The 182-day bill fell by 17 basis points to 6.68 per cent, while the 364-day bill dropped 66 basis points to 10.11 per cent.
The auction was oversubscribed by 51.6 per cent, with investors tendering GH¢9.94 billion against the government’s target of GH¢6.55 billion.
Despite the strong demand, IC Insights warns that the 91-day yield has reached a trough and may require upward repricing to restore a positive real yield, given that inflation now stands at 5.0 per cent. At 4.80 per cent, the 91-day yield is below the inflation rate, meaning investors in short-term government securities are effectively earning a negative real return.
The central bank’s real interest rate gap remains firmly in positive (tight) territory and, according to the BoG’s Quarterly Projection Model, is not projected to return to neutral until the end of 2026.
Cedi Under Pressure
The cedi has come under renewed depreciation pressure in September, partially reversing a 4.87 per cent gain recorded in August. In the interbank market, the local currency weakened by 1.85 per cent to GH¢11.46 to the US dollar, extending its year-to-date depreciation to about 8.77 per cent. At forex bureaus, the dollar was selling at GH¢11.95 as of September 15.
Databank Research attributed the cedi’s weakness to strong corporate and offshore foreign exchange demand, particularly for import payments, coupon repatriation and an early year-end inventory build-up, against relatively tight interbank supply.
“At the same time, the BoG’s reportedly lower US$500 million September 2026 intervention target further reduced the near-term liquidity cushion,” the research firm noted.
GoldBod’s planned US$700 million forex supply to commercial banks, together with continued BoG support and reserve accumulation, is expected to improve market liquidity and help contain the risk of a disorderly adjustment.
Credit Conditions and Banking Sector Resilience
Despite the policy rate hold, credit conditions have eased significantly. Private-sector credit grew by 41.2 per cent year-on-year in nominal terms in June 2026, up from 8.6 per cent a year earlier, while real private-sector credit growth reached 34.1 per cent.
The banking sector’s Capital Adequacy Ratio stood at 20.4 per cent, well above the prudential minimum of 13 per cent, while the gross non-performing loan ratio declined to 16.1 per cent at the end of June 2026 from over 23 per cent a year earlier.
BoG Governor Asiama has urged banks to deepen lending to small and medium enterprises and the agricultural sector, noting that easing financial conditions are beginning to translate into stronger credit flows.
What a Hold Means for Borrowers
A sustained policy rate of 14.0 per cent will mean the cost of credit will not change much for the next two and a half months, as the next MPC meeting is scheduled for November 2026. Commercial banks typically adjust their lending rates in response to changes in the policy rate, though the transmission is often gradual.
If the MPC cuts the rate to 12.5 per cent as Databank projects, it would mark another significant step in the central bank’s gradual shift towards a less restrictive monetary policy stance, further lowering the cost of borrowing and potentially strengthening credit transmission to businesses and households.
However, the balance between supporting economic growth and containing renewed inflationary pressures is expected to remain central to the MPC’s decision. The IMF has cautioned the Bank of Ghana to proceed cautiously with further rate cuts, warning that easing too quickly could fuel inflation.
Background: The Easing Cycle
The Bank of Ghana began its easing cycle in July 2025, when it reduced the policy rate from 28 per cent, reflecting a sharp decline in inflation from a peak of 54.1 per cent in December 2022. The central bank cut rates at five consecutive meetings through March 2026, taking the rate from 28 per cent to 14 per cent — a cumulative reduction of 1,400 basis points.
The aggressive easing was made possible by Ghana’s macroeconomic stabilisation following the completion of its debt restructuring programme, which included a Eurobond exchange in 2024 and the SADEREA notes exchange in July 2026. The IMF lifted Ghana from ‘critical’ to ‘moderate’ debt distress in August 2026.
The economy has shown resilience, with real GDP growth reaching 6.4 per cent in the first quarter of 2026. The World Bank projects growth to moderate to 4.8 per cent for the full year, while the African Development Bank forecasts 5 per cent.
The current account surplus increased to US12.9 billion, equivalent to five months of import cover.
The Road Ahead
As the MPC convenes from September 22 to 24, the Committee faces a difficult calculus. On one hand, the real policy rate remains firmly positive at 9.0 per cent, providing ample room for a modest cut to support growth and reduce borrowing costs. On the other, inflation has risen for two consecutive months to 5.0 per cent, the cedi is under pressure and global energy prices remain elevated.
IC Insights believes the MPC will prioritise the preservation of policy headroom, keeping the rate at 14 per cent to accommodate any unexpected spike in inflation without a need for a near-term hike. Databank, by contrast, expects the MPC to resume its easing cycle, arguing that the underlying disinflation process has not been completely derailed and that stronger credit growth, adequate bank capital and improving asset quality provide room for further monetary easing.
The decision, to be announced on September 24, will shape borrowing costs, investment decisions and exchange rate dynamics for the remainder of 2026.
