By Nadia Ntiamoah
The Bank of Ghana (BoG) could resume cutting its policy rate at its final Monetary Policy Committee (MPC) meeting of 2026, but analysts say the decision will largely depend on developments in fuel prices and other energy-related costs.
The MPC has maintained the policy rate at 14% for three consecutive meetings, adopting a cautious approach amid renewed increases in energy, utility and transportation costs that could put pressure on the country’s inflation outlook.
According to Databank Research, the relatively low level of headline inflation may not, on its own, be sufficient to persuade the MPC to reduce the policy rate again. The central issue, analysts say, will be whether the recent rise in costs proves temporary or develops into a more persistent source of inflationary pressure.
A sustained decline in fuel prices and related transportation costs could provide some relief to businesses and households. Such a development could help keep inflation expectations under control and create greater room for the central bank to resume monetary easing.
However, the report warns that a prolonged increase in fuel and energy costs could force the MPC to maintain its cautious stance, particularly if businesses begin passing higher operating and transportation expenses on to consumers through increased prices.
Databank Research views the latest decision to keep the policy rate at 14% as a risk-management pause rather than a fundamental shift in the country’s disinflation trend.
The analysis notes that underlying inflation remains contained and that the real policy rate remains firmly positive. However, higher energy, utility and transport costs could generate second-round inflationary effects if businesses transfer the additional costs to consumers.
Beyond fuel and energy prices, the MPC is also expected to closely monitor developments in the foreign exchange market and the external reserves.
