BoG may cut policy rate to 12% or 13% in September – Databank

Databank Research expects the Bank of Ghana’s Monetary Policy Committee (MPC) to consider a modest reduction in the benchmark policy rate to between 12% and 13% at its next meeting in September, 2026.

The projection follows the MPC’s decision to maintain the policy rate at 14% for a second consecutive meeting on Wednesday, July 22, 2026.

“We expect the MPC to consider a modest rate cut to 13% or 12% in Sep’26. We view recent inflation upticks as a structural normalisation toward the 8% ±2% target corridor following early-year undershoots (around 3% levels), rather than an alarming threat to price stability,” the report said.

The Bank of Ghana maintained its monetary policy rate at 14%, citing heightened global uncertainty, renewed inflationary risks and the need to assess the potential impact of escalating geopolitical tensions on the domestic economy.

Governor Dr. Johnson Pandit Asiama said the current policy stance remains appropriate to guide inflation towards the Bank’s medium-term target band while allowing policymakers time to assess the impact of renewed conflict in the Middle East.

Inflation outlook

Databank Research said recent increases in inflation should be viewed as a normalisation towards the Bank of Ghana’s target corridor of 8% ±2 percentage points, rather than a significant threat to price stability.

It said inflation had fallen to unusually low levels of around 3% earlier in the year, and the recent uptick represents a gradual return towards the central bank’s medium-term target range.

The research firm expects the upcoming August harvest to boost domestic food supply and support softer inflation outcomes.

It added that continued stability in the cedi could further ease price pressures and create room for the central bank to gradually shift its policy focus towards supporting economic growth.

Databank Research also noted that a temporary easing of geopolitical tensions in the Middle East could reduce the risk premium in global crude oil markets.

Should oil prices remain below US$80 per barrel, the report said, the development could provide additional policy space for the Bank of Ghana to gradually ease monetary policy.