The Advisor to the Governor of the Bank of Ghana (BoG), Dr John Kwakye, has explained that the central bank’s decision to maintain the monetary policy rate at 14% was guided by the need to balance emerging inflation risks from the Middle East conflict with Ghana’s strong economic growth outlook.
According to him, the Monetary Policy Committee (MPC) recognised that ongoing geopolitical tensions could create upward pressure on inflation, particularly through global commodity prices and other external factors.
“The committee saw that there were some upside risks, especially coming from the Middle East conflict,” Dr. Kwakye said on Citi FM’s Breakfast Show on Thursday, July 23, 2026.
“But despite that, the staff forecast was showing that inflation will still be contained within the Bank of Ghana’s target band of six to eight percent. Even though there are some upside risks to inflation, it is not going to go beyond the target band.”
The MPC on Wednesday, July 22, 2026, unanimously maintained the policy rate at 14% following its 131st regular meeting held from July 20 to 22, citing heightened global uncertainty, renewed inflationary pressures and the need to assess the impact of escalating geopolitical tensions on Ghana’s economy.
Dr. Kwakye said the committee weighed the risks to inflation against the country’s strong economic performance before deciding to leave the benchmark rate unchanged.
He noted that Ghana’s economy expanded by 6.4% in the first quarter of 2026, describing the growth as “quite high” and robust enough to support the MPC’s decision.
“The committee was comfortable with economic growth,” he said. “On the basis of this consideration of the balance of risk between inflation and growth, the committee was being a bit cautious, and they decided to hold the rate at 14%.”
He added that the current policy stance remains sufficiently restrictive to keep inflation under control.
“At 14%, the policy rate is tight,” he said. “The committee wants to maintain this tight policy stance. Instead of increasing it, they feel that the current stance of monetary policy is tight enough to contain inflation within the target band in spite of the upside risks.”
Dr. Kwakye said the Bank of Ghana would continue monitoring global developments closely and was prepared to act if inflationary pressures intensified.
“The governor indicated that they will be monitoring the situation closely, and if it should become necessary, they will act accordingly to make sure that inflation is contained within the target band,” he said.
