In brief
- Anchored amid uncertainty. The Bank of Ghana’s monetary policy committee unanimously maintained the policy rate at 14.0%, in line with our expectations for the July 2026 MPC meeting. Despite highlighting the war-related global risks, we did not perceive an imminent hawkish shift in the Committee’s tone. We view the “rate-hold” decision as a strategic use of the monetary policy headroom created by inflation remaining below target, despite edging up towards the lower bound of the 6.0% – 10.0% target band.
- Liquidity Recalibration: The BOG’s CRR reform is gaining traction, but more work ahead. The June 2026 reform to the Cash Reserve Ratio (CRR) is delivering results, as the Governor indicated that GHS12.0bn has been absorbed so far (broadly in line with our projected GHS 16.0bn mop-up), although the full impact remains ahead. We also observed that the Bank of Ghana continues to refine its liquidity tools, including ending GOLDBOD prefinancing and considering a 7-day tenor for future BOG bills, to address excess liquidity and restore interbank rates closer to the policy corridor.
- Strong forex buffers mask external vulnerabilities. Ghana’s gross forex reserve remains resilient at 5.0 months of import cover (USD 12.9bn) as of June 2026, despite a USD 1.2bn quarter-on-quarter decline. We attribute the drawdown to the USD 811.0mn FX intervention in early June, and the USD 700.0mn Eurobond payment whose drawdown likely occurred in late-June for the 03 July 2026 debt settlement. While we believe that external buffers remain strong, the sharp quarter-on-quarter decline in FX reserves highlights Ghana’s continued exposure to external shocks and financing pressures.
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