- Further Rate Cuts Possible if Middle East Risks Ease – BoG Governor
Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, says ongoing geopolitical tensions in the Middle East have slowed Ghana’s path toward single-digit interest rates, despite recent improvements in inflation and broader macroeconomic indicators.
Speaking at the Ghana-UK Investment Summit 2026, Dr Asiama said the Bank of Ghana had expected a faster pace of monetary easing as inflation continued to decline, but external shocks linked to the Middle East crisis had complicated the outlook.
According to the Governor, developments in the region have created uncertainty in global markets, affecting inflation expectations and monetary policy decisions across economies, including Ghana.
He noted that the conflict has implications for global energy prices, shipping costs and supply chains, all of which can feed into domestic inflation and influence the central bank’s policy stance.
The Governor said while Ghana’s macroeconomic indicators had improved significantly in recent months, policymakers must remain cautious to preserve price stability and protect the gains made in stabilising the economy.
“If developments in the Middle East normalise, it could create room for further easing of the policy rate,” Dr Asiama said, signalling that future rate cuts remain possible if external risks subside and inflationary pressures continue to ease.
The Bank of Ghana has maintained a tight monetary policy stance in recent years to fight inflation, stabilise the cedi and restore confidence in the economy.
Recent improvements in inflation and exchange rate stability have raised expectations among businesses and investors that borrowing costs could fall further.
For businesses, the Governor’s comments offer both reassurance and caution.
They suggest that the central bank remains open to further monetary easing but will not rush into deeper cuts if global risks threaten domestic price stability.
High borrowing costs remain one of the biggest constraints facing businesses in Ghana, particularly small and medium-sized enterprises that depend on bank credit for working capital, expansion and inventory financing.
A faster decline in interest rates could support investment, job creation and private sector recovery. But premature easing could also weaken the inflation gains that have helped restore macroeconomic confidence.
The Governor’s remarks, therefore, point to a delicate balancing act for the Bank of Ghana: supporting growth without reopening inflationary pressures. For now, Ghana’s path to cheaper credit appears tied not only to domestic inflation trends but also to external risks beyond the country’s control.
