Ghana MPC meets amid 5% inflation and rising currency pressure

Ghana’s Monetary Policy Committee (MPC) has begun its September meeting as inflation rises to 5% and renewed pressure on the Ghana cedi adds to the challenges facing the Bank of Ghana.

Joy Business reported on Wednesday, September 23, that the MPC had commenced its deliberations.

The meeting comes after inflation rose from 4.6% in July to 5% in August, while exchange-rate pressures and external risks, including developments in the Middle East and US interest rates, are expected to influence the central bank’s policy-rate decision.

Ghana inflation rises to 5%

The rise in inflation signals renewed price pressures after inflation eased to 4.6% in July, complicating the Bank of Ghana’s effort to balance price stability with economic growth.

• “Inflation has been rising in recent months, reaching 5% in August 2026, raising concerns about further price pressures,” the report read in part.
• The Ghana cedi is another key consideration as policymakers assess whether monetary policy can limit further depreciation without worsening credit conditions for businesses already facing challenges accessing financing.
• A tighter policy stance could help address inflation and exchange-rate pressures, but higher interest rates could also increase borrowing costs for businesses and weigh on economic activity.
• External developments could further complicate the decision, with weaker gold prices potentially reducing foreign-exchange inflows through GoldBod, slowing reserve accumulation and limiting the central bank’s capacity to intervene in the currency market.

With the policy rate at 14%, some analysts favour maintaining the rate or making a marginal reduction rather than tightening monetary policy. The MPC’s decision will be guided by economic data as it weighs inflation, exchange-rate risks and economic growth.

Bank of Ghana rate cuts face reversal

Ghana’s monetary policy has shifted significantly over the past year as inflation eased and the Bank of Ghana created room to reduce borrowing costs.

Nairametrics reported on September 17, 2025, that the central bank cut its policy rate to 21.5%. By November 26, 2025, it had reduced the rate further to 18%.

Inflation continued to moderate into 2026, reaching 3.2% in March, its lowest level since 2021, according to a Nairametrics report published on April 1.

By May, however, inflation had edged up to 3.4% in April, marking an early reversal in the downward trend.

On July 23, 2026, the Bank of Ghana maintained its policy rate at 14%, with concerns over Middle East tensions and their potential impact on inflation influencing the outlook.

The latest MPC meeting therefore comes after a period of substantial rate cuts and a recent reversal in inflation, leaving policymakers to assess whether the increase in consumer prices is temporary or signals a renewed inflationary trend.

Ghana inflation rebound raises risks

Nairametrics reported on August 6 that Ghana’s inflation slowed to 4.6% in July from 5.3% in June, supported by lower food prices and relative exchange-rate stability.

• Food and non-alcoholic beverage inflation fell to 3.1% from 3.9%, while imported inflation declined to 2% from 2.3%.
• The July improvement suggested that price pressures were easing and gave the central bank some room to maintain its accommodative policy stance. However, the report identified Middle East tensions, global oil prices and possible utility tariff increases as risks to the inflation outlook.
• The subsequent increase in inflation to 5% in August has changed the immediate policy environment ahead of the September MPC meeting.

The Committee is now assessing the latest inflation data alongside developments in the cedi, borrowing conditions and the need to support economic activity as it considers its next policy decision.