Inflation outlook remains key to BoG policy rate decisions - Governor

The Bank of Ghana (BoG) Governor, Dr Johnson Asiama, has explained that the outlook for inflation remains the key consideration guiding the Monetary Policy Committee’s (MPC) decisions on the policy rate.

According to him, the MPC does not base its decisions solely on current inflation figures but also assesses where inflation is likely to head and the risks that could alter its projected path.

“This is why our decisions are always guided by the inflation outlook,” Dr Asiama said.

He made the remarks at a High-Level Forum on the Modernisation of Monetary Policy Formulation and Implementation held at the Kempinski Gold Coast Hotel in Accra on Monday, August 17, 2026.

The forum provided participants with an opportunity to engage the Governor on the workings of the MPC, including how inflation expectations, emerging economic risks and divergent views among members feed into policy decisions.

Dr Asiama said recent developments in the Middle East were among the factors that prompted the MPC to pause its easing cycle and maintain the policy rate.

He explained that although he had initially expected the committee to continue reducing the policy rate, developments in the Middle East altered the inflation outlook for the remainder of the year.

“Like some two months ago, I thought that we would go ahead with the easing cycle. However, fresh developments in the Middle East showed that end-of-year inflation will be affected, hence the need to hold the policy rate to try to prevent inflation from rising further in the coming months,” he said.

The Governor further disclosed that the MPC has moved away from seeking consensus in its deliberations, with decisions now determined by a majority vote.

He said the change was intended to give members greater room to express their independent views during policy discussions.

“If you go for a consensus, more or less, you are constraining everyone to fall in line,” the Governor said.

Dr Asiama stressed that MPC members are expected to exercise their independence and defend their positions based on their assessment of economic conditions, rather than being influenced by the Governor.

He also identified inflation expectations as another important factor in determining the policy rate, noting that the Bank relies on extensive research and analysis before arriving at its decisions.

“We also have a team that goes out to do the necessary research, and all these things guide our policy rate decisions,” the Bank of Ghana Governor added.

The comments highlight the MPC’s focus on preventing temporary shocks and emerging risks from becoming entrenched in inflation expectations as it assesses the appropriate direction of monetary policy.

ANAS/MA

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