BoG Governor Raises Alarm Over Reserves, Energy Risks as MPC Convenes 130th Meeting

Dr. Johnson Asiama, Governor of the Bank of Ghana, has raised concerns over increasing threats to Ghana’s foreign exchange reserves and inflation outlook, warning that rising global energy prices caused by the worsening Middle East conflict could put pressure on the country’s economy.

Speaking at the opening of the 130th Monetary Policy Committee (MPC) meeting in Accra on Monday, Dr. Asiama said although Ghana’s economy has remained resilient, inflation recorded its first increase since December 2025, a development he described as worrying.

He explained that the country is currently facing what he called a "dual channel inflation risk," driven by domestic energy supply challenges and external price pressures linked to the Middle East crisis.

There are a number of risks on the horizon that I need to mention. First, the prolonged Middle East conflict and sustained energy price increases, alongside domestic energy supply disruptions and external cost push pressures, he stated.

Dr. Asiama also highlighted risks surrounding Ghana’s current account and foreign exchange reserves. According to him, reduced external revenues and the country’s ongoing power challenges are increasing business costs and keeping consumer inflation expectations high, despite improvements in some economic indicators.

These are all risks which, if not addressed, will dislodge inflation expectations before they are effectively anchored. These risks will be central to the discussions this week, he said.

The Governor identified the closure of the Strait of Hormuz as a major factor behind the continued rise in global crude oil prices, noting that the effects are already being felt through higher fuel prices, transport fares, import costs, and overall consumer prices.

He further revealed that the International Monetary Fund had revised its 2026 global growth forecast downward from 3.3 percent to 3.1 percent because of the conflict’s impact on global supply and demand.

Despite the risks, Dr. Asiama said Ghana’s current account surplus for the first quarter of 2026 exceeded the same period last year by US$652 million, describing it as a sign of the economy’s resilience. However, he warned that prolonged increases in energy prices could quickly reverse those gains.

According to him, the MPC will consider whether adjustments to the interest rate structure are needed to prevent inflation expectations from rising further, while also assessing how monetary policy is affecting lending conditions and credit growth.

Dr. Asiama also stressed the importance of a strong banking sector in helping the economy withstand shocks and support growth through increased credit expansion.

Looking forward, the economy will need a strong banking sector. It will also need steps to ensure that financial stability concerns are addressed and that the banking system is made to deliver on credit expansion, he added.

A policy rate decision is expected to be announced on Wednesday, with markets closely watching the outcome following the completion of Ghana’s IMF supported US$3 billion programme. At the previous MPC meeting in March, the Bank of Ghana reduced its policy rate by 150 basis points, from 15.5 percent to 14 percent, to support economic recovery and ease monetary conditions.