Dr. Johnson Asiama
The Monetary Policy Committee (MPC) has reduced the policy rate by 150 basis points to 14 percent, citing easing inflationary pressures, strong macroeconomic performance, and high interest rates.
The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama who announced this at a press conference at the end of its end of its 129th MPC meeting at the Bank Square in Accra yesterday said upside risks to the inflation profile, favourable domestic macroeconomic conditions and high prevailing real interest rates provide scope to ease the policy rate further.
He said the cuts is necessary to support growth while maintaining price stability.
“Consequently, the MPC decided to reduce the monetary policy rate by 150 basis points to 14%,” he said.
Dr. Asiama however mentioned that rising geopolitical tensions in the Middle East have deepened uncertainty in the external sector as the bank’s latest forecast suggested that headline inflation will remain within the medium-term target.
He also mentioned that the strong disinflation during the past 14 months has been supported by the relatively tight monetary policy stance, cedi appreciation, and improved food supply conditions.
“Headline inflation declined further to 3.3% in February 2026, from 5.4% in December 2025, and this was driven by both food and non-food inflation. Core inflation, which excludes energy and utility items, also declined, indicating muted underlying price pressures,” he added.
The Governor also stated that growth in monetary aggregates continued to slow in February 2026, reflecting the relatively tight monetary policy stance. Reserve money contracted by 0.5% year-on-year in February compared to 68.8% growth a year earlier.
“Also, broad money supply growth eased to 16% from 33.1% over the same period. Interest rates on short-term bills declined sharply in the first two months of 2026 on the back of easing inflation expectations and fiscal restraint. Yields on the benchmark instrument, the 91-day treasury bill, declined sharply in February,” he added.
Dr. Asiama mentioned that the conflict in Iran has disrupted global supply chains, increased crude oil market volatility, and raised financial stability concerns with heightened global uncertainty.
He however stated that althoughglobal headline inflation has been on a downward trajectory, recent surge in oil prices has renewed inflation concerns and may compel some central banks to reassess their monetary policy stance.
“Consequently, global financing conditions, which remain broadly accommodative, could tighten in the near term,” he noted.
The further stated that the Committee will continue to closely monitor developments, especially in the Middle East, and stands ready to take appropriate policy actions as needed to safeguard price stability.
By Ebenezer K. Amponsah