Ghana halts year-long easing cycle as inflation picks up

The Central Bank of Ghana has kept its benchmark interest rate unchanged at 14 percent, signalling a cautious approach as policymakers weigh rising global uncertainty against signs of improving domestic stability.

The decision, announced after the bank’s May 2026 Monetary Policy Committee meeting, ends a streak of five consecutive rate cuts and reflects growing concern that external shocks, particularly escalating tensions in the Middle East, could place renewed pressure on inflation and the broader economy.

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Johnson Asiama,  Governor of the Bank, said the central bank opted to hold rates steady in order to preserve recent gains in macroeconomic stability while leaving room to respond to emerging risks.

“The committee decided to maintain the policy rate at 14 percent to consolidate the gains achieved in macroeconomic stability while closely monitoring domestic and external risks,” Asiama said.

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He warned that the conflict in the Middle East had “stoked inflationary concerns and underlined policy uncertainty, with potential implications for the domestic economy.”

The move suggests Ghana’s central bank is becoming more cautious after months of easing borrowing costs to support growth. While inflation remains relatively low by recent standards, policymakers appear reluctant to cut rates further at a time of heightened geopolitical uncertainty and fragile global markets.

Data released ahead of the meeting showed Ghana’s annual inflation rate rose slightly to 3.4 percent in April from 3.2 percent in March, marking a three month high. Even so, price pressures remain largely contained compared with the sharp inflation spikes the country experienced in recent years.

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Economists say the decision reflects an attempt to strike a balance between supporting businesses and consumers through lower borrowing costs while ensuring inflation expectations remain firmly anchored.

The central bank’s latest stance also comes as governments and investors across Africa closely monitor the impact of global oil prices, supply chain disruptions and currency pressures linked to instability in the Middle East.

For now, Ghanaian policymakers appear determined to avoid moving too quickly, preferring to assess how global risks evolve before making further adjustments to interest rates.