{"id":15450,"date":"2026-03-19T14:30:25","date_gmt":"2026-03-19T14:30:25","guid":{"rendered":"https:\/\/gnbcc.net\/?p=15450"},"modified":"2026-03-19T14:30:30","modified_gmt":"2026-03-19T14:30:30","slug":"mpc-weighs-policy-path-as-oil-surge-tests-disinflation-gains","status":"publish","type":"post","link":"https:\/\/gnbcc.net\/mpc-weighs-policy-path-as-oil-surge-tests-disinflation-gains\/","title":{"rendered":"MPC weighs policy path as oil surge tests disinflation gains"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">The Monetary Policy Committee (MPC) is meeting under improving domestic economic conditions but rising global energy prices that threaten to test the country\u2019s steady disinflation trend, Bank of Ghana Governor, Dr. Johnson Pandit Asiama said at the opening of the central bank\u2019s 129th policy meeting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Headline inflation slowed to 3.3 percent year-on-year in February, extending the country\u2019s disinflation trend to more than a year and placing the rate below the lower bound of the Bank of Ghana\u2019s medium-term target band, according to data referenced during the opening session.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cInflation at 3.3 percent is not merely within the target band; it is below the lower bound,\u201d Dr. Asiama told committee members, noting that such figures would have been considered difficult to achieve in recent past.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The decline in inflation has been supported partly by falling transportation costs, which have been in deflation territory for several months and helped moderate consumer price pressures. However, the recent surge in global oil prices threatens to reverse that trend and complicate the policy outlook.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">International crude prices have risen sharply amid escalating geopolitical tensions in the Gulf region, particularly the ongoing conflict involving Iran and threats to shipping through the Strait of Hormuz. Brent crude rose to about US$105.15 per barrel on March 16, while West Texas Intermediate traded near US$100.32, levels not seen since 2022.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Oil prices have climbed roughly 41 percent over the past month, rising from around US$70 per barrel and surpassing the US$100 threshold for the first time in four years. The rally has been driven by supply disruptions and production cuts by Middle Eastern OPEC+ producers, including Saudi Arabia, the United Arab Emirates, Iraq and Kuwait.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Higher energy prices could translate into imported inflation for Ghana by increasing fuel costs, transport fares and logistics expenses across the economy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe sustained oil price increases could raise the risk of imported inflation,\u201d Dr. Asiama said, adding that disruptions to energy supply routes and shipping corridors were increasing volatility in global oil markets and introducing uncertainty into the inflation outlook.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Despite these external risks, domestic macroeconomic indicators have strengthened. The Bank of Ghana\u2019s Composite Index of Economic Activity grew 8.4 percent year-on-year at the start of 2026, supported by improving business and consumer confidence and early signs of credit recovery.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">External buffers have also improved. Gross international reserves rose to about US$14.5billion, equivalent to 5.8 months of import cover, compared with slightly above US$13billion at the time of the previous MPC meeting.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Fiscal conditions have strengthened as well, with Ghana recording a primary surplus of 2.6 percent of GDP at the end of 2025, reversing a 3.9 percent deficit the previous year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The central bank must now weigh how these gains interact with rising global risks when calibrating policy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Market participants had expected further easing in monetary policy after a prolonged disinflation period. Yields on 91-day and 182-day Treasury bills stood at 4.82 percent and 6.3 percent respectively at the beginning of the second week of March, while the Ghana Reference Rate was 11.71 percent and the monetary policy rate currently stands at 15.5 percent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the surge in global energy prices may slow the pace of policy easing if imported inflation pressures intensify.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Authorities could also face fiscal trade-offs. One potential response discussed in policy circles is the suspension of the additional GH\u00a21 levy on fuel products to soften the pass-through of higher international prices to domestic pump prices.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Beyond the immediate inflation risks, the MPC is also examining the implications of the government\u2019s Ghana Accelerated National Reserve Accumulation Programme (GANRA), which aims to increase international reserves to 15 months of import cover by 2028.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As the committee deliberates ahead of its rate decision, Asiama said policy-makers must weigh domestic progress against external uncertainty.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe judgment required today is more complex,\u201d he said. \u201cWe must make our decision at the intersection of domestic success and external uncertainty.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Business community urges steeper rate cut&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The business community is once again calling for a sharper reduction in the benchmark rate as the MPC deliberates on monetary policy amid mixed conditions \u2013 improving domestic conditions and potential external shocks.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Business leaders argue that the current rate does not reflect the recent gains in disinflation and continues to keep borrowing costs high.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">They are urging the committee to consider cutting the policy rate by at least 300 basis points, asserting that such a move would lower financing costs, stimulate economic activity and help revive the country\u2019s struggling manufacturing sector.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The MPC commenced its meeting on March 15 to discuss monetary policy and is expected to announce its stance at the close of the three-day meeting on March 18, 2026.<\/p>\n\n\n\n<figure class=\"wp-block-image\" id=\"attachment_263929\"><img decoding=\"async\" src=\"https:\/\/i0.wp.com\/thebftonline.com\/wp-content\/uploads\/2026\/03\/GNCCI-CEO-Mark-Badu-Aboagye.jpg?resize=332%2C332&amp;ssl=1\" alt=\"\" class=\"wp-image-263929\"\/><figcaption class=\"wp-element-caption\">GNCCI CEO, Mark Badu-Aboagye<\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">In an exclusive interview with the&nbsp;<a href=\"https:\/\/thebftonline.com\/2026\/03\/17\/mpc-weighs-policy-path-as-oil-surge-tests-disinflation-gains\/#\" rel=\"nofollow noopener\" target=\"_blank\">&nbsp;Business and Financial Times<\/a>&nbsp;(B&amp;FT), the Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI), Mark Badu-Aboagye, said there is a \u201cmisalignment\u201d between the policy rate and inflation that must be addressed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cInflation is far, far lower than the policy rate. This creates a much larger real interest rate, which should theoretically attract foreign investors, but because it does not reflect the real values, it is not truly drawing investment,\u201d he explained.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He argued that even though the central bank has slashed policy rate significantly in recent months, the further drop in inflation continues to widen the gap between inflation and the benchmark rate.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, Mr. Badu-Aboagye maintained that narrowing this gap is critical to making Ghanaian goods competitive and stimulate the productive sectors of the economy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe expect the policy rate to come further down to be commensurate with the inflation rate we are reporting. It should come at least closer to 10 percent to align with the current level of inflation,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The central bank has recently pursued a gradual reduction of the policy rate, but business leaders argue that the pace is too slow given the sharp decline in consumer price growth.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While headline inflation has dropped dramatically from 54.1 percent in December 2022 \u2013 at the peak of the economic crisis \u2013 to 3.3 percent in February 2026, the policy rate has remained relatively sticky, having seen only modest adjustments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Bank of Ghana (BoG) begun policy rate easing in July 2025, following significant drop in inflation and relative exchange rate stability. It has since maintained a cautious posture, cutting the benchmark rate cumulatively by 1,250 basis to date \u2013 from 28 percent in July 2025 to 15.5 percent in January 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The policy rate adjustments have reverberated positively on the Ghana Reference Rate (GRR) \u2013 the benchmark used to determine finance cost. The GRR plummeted from 23.69 percent in July 2025 to 11.71 in March 2026.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">According to industry data, average lending rates currently hover between 20 and 22 percent, marking a significant drop from the over 30 percent interest rates at the peak of the economic crisis.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Mr. Badu-Aboagye noted that while this drop is welcome, it is insufficient to restore competitiveness, especially in the manufacturing sector. \u201cComparatively, around the sub-region, the 20-22 percent that we are seeing is relatively higher than what other countries are doing. It makes our cost of production very high, and our prices are also very high. Businesses are not competitive,\u201d he said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He said this creates incentives to import rather than produce locally, citing the recent inflation data as evidence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cInflation for locally manufactured goods is higher than the general inflation. It means that if you are importing, despite the duties you pay, you can still sell the product at a lower price than what is being produced here. The cost of production is still high, and interest rates are part of the factors contributing to that,\u201d Mr. Badu-Aboagye stated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">He maintained that access to long-term financing is critical to stemming this anomaly. Mr. Badu-Aboagye explained that while discussions with the Ghana Association of Banks (GAB) have been positive, banks are still skewed toward short-term facilities, which are not suited for capital intensive sectors like manufacturing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cBecause businesses are forced to use short-term facilities for long-term projects, they are not able to pay, which is actually why non-performing loans within the bank books are also increasing,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Monetary Policy Committee (MPC) is meeting under improving domestic economic conditions but rising global energy prices that threaten to test the country\u2019s steady disinflation trend, Bank of Ghana Governor, Dr. Johnson Pandit Asiama said at the opening of the central bank\u2019s 129th policy meeting.<\/p>\n","protected":false},"author":1,"featured_media":15451,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"yes","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[153],"tags":[],"class_list":["post-15450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-articles"],"jetpack-related-posts":[{"id":14080,"url":"https:\/\/gnbcc.net\/stage-set-for-multi-year-low-inflation-era-bog-governor\/","url_meta":{"origin":15450,"position":0},"title":"Stage set for multi-year low-inflation era \u2013 BoG Governor","author":"Michael Teye","date":"November 28, 2025","format":false,"excerpt":"The economy is entering what the Bank of Ghana says could be a sustained period of price stability, with inflation projected to settle between 4 percent and 6 percent by year-end and remain within the target band through 2026.","rel":"","context":"In &quot;News Articles&quot;","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BO.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BO.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BO.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BO.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BO.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":14831,"url":"https:\/\/gnbcc.net\/central-bank-extends-easing-cycle-with-250bps-rate-cut-to-15-5\/","url_meta":{"origin":15450,"position":1},"title":"Central bank extends easing cycle with 250bps rate cut to 15.5%","author":"Michael Teye","date":"January 30, 2026","format":false,"excerpt":"The Bank of Ghana (BoG) has cut its benchmark interest rate by 250 basis points (bps) to 15.5 percent, extending its easing cycle to a four-year low as falling inflation and improved macroeconomic conditions allow policymakers to shift focus toward supporting growth.","rel":"","context":"In &quot;News Articles&quot;","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/01\/BOG-th-scaled.jpg?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":14100,"url":"https:\/\/gnbcc.net\/bog-overhauls-liquidity-tools-cuts-policy-rate-to-18\/","url_meta":{"origin":15450,"position":2},"title":"BoG overhauls liquidity tools, cuts policy rate to 18%","author":"Michael Teye","date":"November 28, 2025","format":false,"excerpt":"The central bank has overhauled its liquidity-management framework and delivered another steep interest-rate cut as inflation fell faster than expected and real interest rates climbed to multi-year highs.","rel":"","context":"In &quot;News Articles&quot;","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BOG-liquiidt.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BOG-liquiidt.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BOG-liquiidt.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/11\/BOG-liquiidt.jpg?resize=700%2C400&ssl=1 2x, 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Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/12\/Banksa.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/12\/Banksa.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/12\/Banksa.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/12\/Banksa.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2025\/12\/Banksa.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":16253,"url":"https:\/\/gnbcc.net\/rate-cut-window-narrows-on-inflation-pressures\/","url_meta":{"origin":15450,"position":4},"title":"Rate-cut window narrows on inflation pressures","author":"Paul N.","date":"June 12, 2026","format":false,"excerpt":"Room for further monetary policy easing is narrowing after inflation accelerated for a second consecutive month in May, reinforcing concerns within financial markets that the Bank of Ghana (BoG) may have to extend its pause in the rate-cut cycle despite inflation remaining below the medium-term target band. Headline inflation rose\u2026","rel":"","context":"In &quot;News Articles&quot;","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/06\/ESQ-Elsie-3.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/06\/ESQ-Elsie-3.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/06\/ESQ-Elsie-3.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/06\/ESQ-Elsie-3.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/06\/ESQ-Elsie-3.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":18954,"url":"https:\/\/gnbcc.net\/price-pressures-shift-from-food-to-services-as-inflation-rises-to-5\/","url_meta":{"origin":15450,"position":5},"title":"Price pressures shift from food to services \u2026as inflation rises to 5%","author":"Paul N.","date":"September 4, 2026","format":false,"excerpt":"Inflation edged up to 5 percent in August as non-food and services costs increased, even as food inflation continued to ease, according to the Ghana Statistical Service.","rel":"","context":"In &quot;News Articles&quot;","block_context":{"text":"News Articles","link":"https:\/\/gnbcc.net\/category\/news-articles\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/09\/ESQ-Elsie-47.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/09\/ESQ-Elsie-47.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/09\/ESQ-Elsie-47.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/09\/ESQ-Elsie-47.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/gnbcc.net\/wp-content\/uploads\/2026\/09\/ESQ-Elsie-47.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/gnbcc.net\/wp-content\/uploads\/2026\/03\/MPC-scaled.jpg","_links":{"self":[{"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/posts\/15450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/comments?post=15450"}],"version-history":[{"count":1,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/posts\/15450\/revisions"}],"predecessor-version":[{"id":15452,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/posts\/15450\/revisions\/15452"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/media\/15451"}],"wp:attachment":[{"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/media?parent=15450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/categories?post=15450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gnbcc.net\/wp-json\/wp\/v2\/tags?post=15450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}