Editorial: MPC meets as renewed inflation risks tick…

Central bank Governor Dr Johnson P. Asiama, addressing the 130th Monetary Policy Committee meeting early in the week, observed that renewed inflation risks from the prolonged Middle East conflict threaten to complicate Ghana’s recent macroeconomic gains.

Therefore, the MPC is expected to reassess the country’s interest rate and monetary policy framework.

The domestic economy had continued to improve since the committee’s last meeting in March, supported by sustained reforms, lower inflation and improving investor sentiment.

However, he warned that rising global energy prices and worsening external conditions were introducing new risks to inflation and growth. “A deteriorating external environment, characterised by ongoing conflict in the Middle East and its effects on global energy and commodity prices, is introducing new headwinds that must be weighed carefully,” he told the Committee.

The Committee is to examine whether its current monetary policy stance remains appropriate as inflation risks begin to re-emerge globally.

Dr. Asiama further said that several central banks which had begun easing cycles are now pausing or reconsidering those moves due to renewed price pressures linked wih higher energy costs.

For Ghana, an oil-importing economy, the external shock is expected to transmit through higher transport costs, food prices and import bills, potentially affecting inflation expectations. Headline inflation in Ghana has increased for the first time since December 2025, while domestic energy supply disruptions and external commodity price pressures pose additional risks to price stability.

These remarks come as Ghana nears completion of its International Monetary Fund Extended Credit Facility programme in August 2026; following successfully reaching a staff level agreement and preparing for a new 36-month non-financing Policy Coordination Instrument with the IMF.

According to Dr. Asiama, the proposed PCI arrangement will preserve credibility and signal benefits of IMF engagement while reducing reliance on IMF financing. The programme will focus on fiscal consolidation, debt sustainability, financial sector stability, monetary policy reforms and economic diversification.

The MPC is expected to conclude its deliberations and make an announcement on Wednesday, May 20, with markets closely watching for signals on the future direction of interest rates and liquidity management

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