Ghana Holds Interest Rate at 14% as Inflation Risks Rise

AFRICAN BUSINESS AND ECONOMYSeptember 27, 2026 at 10:42 PM UTC

TLDR

Ghana's central bank maintains benchmark interest rate at 14% for the third consecutive meeting, balancing rising inflation with economic growth.
Inflation increased to 5% in August due to non-food prices, with risks from higher crude oil prices, utility tariffs, and global supply disruptions.
Despite easing borrowing conditions, Ghana's economy expanded by 6% in the second quarter, supported by services, ICT, and industry, with foreign reserves at $12 billion covering 4.5 months of imports.

Ghana’s central bank kept its benchmark interest rate at 14% for a third straight meeting as policymakers weighed rising inflation against economic growth. The Monetary Policy Committee voted unanimously to hold the rate after its September meeting, as expected by economists.

Inflation increased to 5% in August from 4.6% in July, driven by non-food prices. The Bank of Ghana said price pressures remain contained but pointed to risks from higher crude oil prices, utility tariffs and global supply disruptions linked to the wars in Iran and Ukraine. Inflation was still below the 11.5% recorded a year earlier.

Borrowing conditions have eased even without another rate cut. The average bank lending rate fell to 15.9% in August from 24.2% a year earlier. The central bank said lenders remain profitable, liquid and adequately capitalised, while asset quality has improved.

The economy expanded 6% in the second quarter, compared with 6.6% a year earlier, supported by services, information and communications technology and industry. Business and consumer sentiment also improved. Ghana’s foreign reserves stood at about $12 billion on September 22, enough to cover 4.5 months of imports.

The combination gives the central bank room to wait before changing rates. At 14%, the policy rate remains 9 percentage points above annual inflation. The next decisions will depend on whether higher fuel and utility costs push inflation further up or whether price pressures remain contained as growth continues.

Key Takeaways

Ghana’s decision to hold at 14% shows how much its monetary position has changed. Inflation is now 5%, leaving a 9-percentage-point gap between inflation and the policy rate, so borrowing conditions remain tight in real terms even after earlier rate cuts. At the same time, commercial lending rates have fallen to 15.9% from 24.2% a year ago, showing that lower inflation and past policy easing are already reaching borrowers. That gives the Bank of Ghana less reason to cut again while external risks are rising. Oil prices, utility tariffs and food costs could push inflation higher, particularly if conflicts in the Middle East and Ukraine continue to affect energy and grain markets. The central bank also has growth on its side. GDP expanded 6% in the second quarter, meaning policymakers do not face an immediate need to reduce rates to support economic activity. Reserves of about $12 billion provide another buffer against currency pressure and higher import costs. The key issue is whether August’s increase in inflation is temporary or the start of a new trend. If inflation keeps rising, the 14% rate gives the bank room to stay on hold. If pressures ease again, further cuts could return to the agenda.

Ghana