BoG warns oil prices above $100 could fuel inflation

The Bank of Ghana has warned that rising global crude oil prices, which have crossed US$100 per barrel, pose a major risk to the country's inflation outlook and could affect efforts to maintain price stability.

Governor of the Bank of Ghana, Dr Johnson Asiama, said the increase in oil prices was among the key external pressures that informed the Monetary Policy Committee's decision to maintain the policy rate at 14 per cent during its July and September meetings.

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Addressing Parliament's Committee on Economy and Development on Friday, November 6, 2026, he explained that higher crude oil prices could create additional cost pressures for the economy, requiring the central bank to remain cautious in its monetary policy decisions.

“Crude oil prices above US$100 per barrel, interest rate increases by the US Federal Reserve and the European Central Bank, and the potential effects of a strong El Niño represent important risks to the inflation outlook,” he said.

Dr Asiama noted that although inflation had remained below the Bank's medium-term target band of 6 to 10 per cent, recent figures showed a gradual increase.

Inflation rose from 5.0 per cent in August to 5.2 per cent in September and 5.5 per cent in October 2026.

He said the Bank expected inflation to move into its target band in the coming quarters, but the timing would depend on developments in domestic and international markets, including the direction of global oil prices.

The Governor explained that the Monetary Policy Committee had earlier reduced the policy rate from 18 per cent in December 2025 to 14 per cent by March 2026, following a sustained decline in inflation.

However, the committee decided to maintain the rate in May, July and September as emerging risks required a more cautious approach.

He said the central bank would continue to monitor oil prices, exchange rate movements and other external developments before taking further policy decisions.

He stressed that the Bank would respond to changing economic conditions rather than follow a predetermined policy path. Dr Asiama assured Parliament that the Bank remained committed to protecting price stability while supporting economic activity.

He said the central bank would take the necessary policy actions if emerging pressures threatened the progress made in bringing inflation under control.

ANAS/EB

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