Accra: The Bank of Ghana Monetary Policy Committee (MPC) is set to meet next week from March 16 to March 18, and one of the key issues on the agenda will be the consideration of gradually easing monetary policy after a prolonged period of disinflation. The meeting comes at a time when the country's steady decline in inflation is facing its first significant external challenge in over a year, as rising global crude prices threaten to reverse one of the main factors that have helped ease consumer price pressures.
According to Ghana Web, international oil prices have seen a sharp increase in recent days, climbing more than 50 percent compared to levels observed during the last domestic fuel pricing window. This surge is largely attributed to geopolitical developments, particularly in the Gulf region. The rising oil prices have raised concerns that transport costs, which have been a significant source of disinflation in recent months, could begin to rise again. This development could complicate the monetary policy outlook just as the central bank prepares for its interest-rate decision.
Higher global oil prices could potentially reverse the current trend, leading to increased transport fares and a broader impact on the consumer basket through higher distribution and logistics costs. Although there was a slight dip in the price of Brent crude late on Monday night, falling back below US$90 from a high of US$119.50, the ongoing US war with Iran could continue to affect inflation rates. UK Chancellor Rachel Reeves has noted that Britain is likely to experience rising inflation due to the conflict, and this could also influence policy deliberations at the Bank of Ghana MPC meeting.
Apakan Securities has indicated that the recent moderation in inflation was driven by favorable base effects, which are now beginning to dissipate. However, the latest inflation figures still support the case for a further policy rate cut. Earlier this year, the central bank reduced its policy rate by 250 basis points to 15.5 percent, citing improved macroeconomic conditions, anchored inflation expectations, and stronger external buffers as reasons for the decision.
Analysts note that high oil prices have a pronounced impact on inflation, especially in African economies that rely heavily on imported, refined petroleum products. The increase in oil prices typically leads to higher pump prices, impacting transportation costs and food distribution expenses. This effect is often exacerbated by currency depreciation, as larger fuel import bills increase the demand for foreign exchange.
Despite these challenges, authorities in Ghana have developed contingency scenarios in case oil prices rise significantly further. Dr. Theophilus Acheampong, a Technical Advisor at the Ministry of Finance, stated that the economy is on a better footing now to respond to such exogenous shocks if they persist. Ghana's external position has improved significantly over the past year, with the country recording a trade surplus of US$13.66 billion in 2025, up from US$9.88 billion in 2024.
The Bank of Ghana has emphasized that its monetary policy decisions will continue to be guided by data, even amid global commodity price fluctuations. Governor Dr. Asiama, while briefing the Parliamentary Committee on Economy and Development, highlighted the bank's commitment to stabilizing the cedi, restoring macroeconomic confidence, and strengthening Ghana's external buffers. He acknowledged the external risks and reiterated the bank's prudence and discipline in its data-driven approach to monetary policy.