BoG Governor Johnson Asiama Explains Why He Has Stopped Cutting Ghana’s Interest Rate

The Bank of Ghana (BoG) has maintained a cautious monetary policy approach to protect the progress made in reducing inflation while managing emerging risks from both domestic and international developments.

The Governor of the central bank, Dr Johnson Asiama, explained that the decision to temporarily halt monetary policy easing was necessary to prevent a reversal of the gains achieved in stabilising prices.

Addressing Parliament’s Committee on Economy and Development on Friday, November 6, Dr Asiama said the first half of 2026 was characterised by economic consolidation, during which the Bank reduced its policy rate in response to declining inflation before suspending further cuts as potential economic risks emerged.

He noted that the monetary policy measures had contributed to sustained economic growth, declining interest rates and improved access to credit for businesses in the private sector.

Ghana also recorded improvements in its external sector balances, while the banking industry continued to demonstrate resilience.

The Bank’s cautious approach is reflected in the Monetary Policy Committee’s decision to keep the policy rate at 14 per cent from May to September 2026.

At its September meeting, most MPC members supported maintaining the rate, citing growing external uncertainties and concerns about the possibility of renewed inflationary pressures.

Dr Asiama indicated that subsequent economic developments had further justified the decision to maintain a careful, evidence-based monetary policy approach.

Meanwhile, Ghana’s inflation rate increased for the third consecutive month, reaching 5.5 per cent in October 2026, compared with 5.2 per cent in September and 9.4 per cent during the corresponding period in 2025.

The October figure represents the highest inflation rate recorded in 11 months, although it remains within the Bank of Ghana’s medium-term target range of 6 to 10 per cent.

The central bank governor identified fluctuations in international crude oil prices, exchange rate movements and domestic price adjustments as some of the major factors that could influence the country’s inflation outlook.

He indicated that the Bank would continue monitoring these developments and implement appropriate monetary policy measures when necessary to maintain price stability.

Dr Asiama also reaffirmed the Bank’s commitment to strengthening the institutional and operational framework underpinning monetary policy.

Key areas of focus include improving liquidity management, maintaining a transparent foreign exchange framework, building international reserves and implementing reforms aimed at restoring the central bank’s financial position.

Source: https://www.citinewsroom.com/2026/11/were-adopting-a-cautious-policy-stance-to-protect-inflation-gains-bog/

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