The Bank of Ghana (BoG) is expected to slow down its monetary policy easing cycle as inflation shows early signs of rising again after more than a year of steady decline.
Fitch Ratings projects that, the Central Bank is likely to maintain a cautious stance after cutting the policy rate by a cumulative 1,400 basis points between July 2025 and March 2026 to bring the benchmark interest rate down to 14%.
The expectation of a pause comes as Ghana’s disinflation trend appears to have stalled.
“We anticipate Bank of Ghana will remain prudent and pause its easing cycle to prevent inflation risks from materialising, after a cumulative 1,400bp monetary policy rate cut between July 2025 and March 2026, to 14%”, Fitch Ratings noted in its report that upgraded Ghana’s credit ratings to B with positive outlook.
Data from the Ghana Statistical Service shows that headline inflation increased to 3.4% in April 2026 from 3.2% in March.
This is the first rise after 15 consecutive months of falling inflation.
The 0.2 percentage-point increase suggests consumer prices may be gradually picking up again, potentially complicating expectations for further interest rate cuts in the near term.
On a month-on-month basis, inflation stood at 1% in April, indicating stronger short-term price pressures within the economy.
The increase was driven mainly by rising costs in housing, water, electricity, gas and other fuels, which contributed more than 37% of the overall inflation figure.
While inflation remains significantly lower compared to the same period last year, recent data points to a gradual upward movement in prices.
The latest inflation figures strengthen the case for the Bank of Ghana to adopt a wait-and-see approach rather than continue aggressive rate cuts.
The concern is that further monetary easing could fuel renewed inflationary pressures, especially if domestic demand strengthens rapidly or external shocks place fresh pressure on the cedi and import costs.
Therefore, a pause in rate cuts would allow policymakers time to assess the impact of previous reductions on inflation, exchange rate stability and overall economic activity.
The central bank’s aggressive easing cycle had been to support economic recovery, reduce borrowing costs and improve credit conditions for businesses and households after a prolonged period of tight monetary policy.
However, maintaining macroeconomic stability may now take priority over additional stimulus as inflation risks begin to re-emerge.
Future monetary policy decisions are expected to depend heavily on inflation trends, currency stability and broader global economic conditions in the months ahead.
