Ghana: Bank of Ghana unexpectedly holds rate in May
Bank stands pat after five successive cuts: At its meeting on 18–20 May, the Bank of Ghana (BOG) unexpectedly decided to maintain its policy rate at 14.00%. The decision came after five consecutive cuts, which slashed interest rates by a cumulative 140 basis points since July 2025.
Uncertain geopolitical backdrop and rising inflation drive decision: The Central Bank’s decision reflected a cautious stance that should anchor inflation expectations while also supporting economic activity. The Iran war has stoked inflationary concerns, and price pressures increased in March for the first time in 16 months. Moreover, underlying global policy uncertainty could have potential implications for domestic economic activity.
Bank to cut ahead, but by less than previously anticipated: The Central Bank did not provide specific forward guidance. Following the outbreak of the war in Iran, our panelists have revised their year-end forecasts upward. Our Consensus is for the BOG to cut the policy rate by 100–200 basis points. One expects a 200-basis-point hike by the end of 2026, while the majority expects the Bank to cut rates less than previously anticipated.
The BOG will reconvene on 22 July.
Panelist insight: Commenting on the outlook, Goldman Sachs’ Ludovica Ambrosino and Andrew Matheny stated:
“Given the current geopolitical uncertainty, we have revised our inflation forecasts higher, in line with our oil forecasts, and edged growth estimates lower, in sympathy with weaker global demand. Consequently, we pushed back our forecasts for the next rate cuts in Ghana until Q3.”