BoG likely to hold policy rate amid inflation – Deloitte

Professional services firm Deloitte says the Bank of Ghana’s Monetary Policy Committee (MPC) is likely to keep the policy rate unchanged to manage inflation risks, despite recent Cedi gains and fiscal consolidation.

The MPC held the policy rate at 28% in May 2025, citing persistent inflation even as the exchange rate remains stable.

In its West Africa MPC Update, Deloitte noted that the Bank of Ghana expects inflation to fall to the 12% target by early 2026, assuming no major shocks.

The report also says Ghana’s banking sector remains well capitalized and liquid, despite elevated non-performing loans.

Implications of the MPC Decision

Deloitte highlights that the positive real return on investment has increased, attracting stronger capital inflows from high-yield government securities.

Maintaining price stability will support economic recovery and boost consumer and business confidence. However, the high-interest rate environment limits credit availability to the real sector.

Deloitte warns of rising inflationary pressures from utility tariff hikes and the impact of global trade tensions.

Regional Outlook

In Nigeria, Deloitte expects the MPC to adopt a cautious stance as well, given a fragile macroeconomic environment. Nigeria’s policy rate currently stands at 27.5%.

Ongoing fiscal policies are expected to support monetary efforts to control inflation. Concerns include electricity tariff increases, forex demand pressures, and structural challenges. Global shocks like falling crude oil prices, due to higher non-OPEC output and U.S. trade uncertainties, also pose risks.