Bank of Ghana policy rate outlook diverges among analysts

Analysts hold diverging views on the Bank of Ghana’s upcoming September Monetary Policy Committee meeting regarding the central bank's policy rate, which currently stands at 14%.

IC Insights expects the Bank of Ghana to maintain the policy rate at 14%. This cautious stance is attributed to potential global oil price surges, such as the recent rise in Brent crude, which could increase fuel import costs and reignite inflation. Analysts suggest the committee may use the current 9% real policy rate as a cushion to absorb sudden inflationary spikes without needing emergency hikes.

Conversely, Databank Research projects a 150 basis point reduction, which would bring the policy rate down to 12.5%. This projection is based on the continued moderation of inflation toward the bank’s medium-term target range of 8% ±2%. Databank notes that while inflationary pressures from energy and imported inputs returned in the first half of the year, the broader disinflation process remains intact.