The first Monetary Policy Committee (MPC) meeting for 2026 of the Bank of Ghana (BoG) is expected to be scheduled to be held this week, and one big question that lingers is whether this meeting will bring more easing to interest rates or otherwise?
For businesses, borrowers, and households, this is their major interest in the MPC meeting. Given the influence of the MPR on lending rates, any major decision on the rate has far-reaching consequences.
For years, the cost of loans in Ghana has been relatively expensive. Mortgages feel out of reach for the ordinary Ghanaian, and even short-term business credit comes at a high cost. Although the MPC has embarked on a number of policy rate easings in the past, the cost of loans still feels out of reach, and businesses still expect further easing.
This, therefore, makes the first MPC meeting in 2026 very crucial.
2025 MPC Decisions in Retrospect
Over the course of 2025, the MPC has steadily shifted its stance from tight restraint to cautious easing. The year opened in January with the policy rate held unchanged at 27 percent, a clear signal that inflation risks still dominated thinking at the time. In March, the rate was raised by 100 basis points to 28 percent to reinforce its inflation-fighting resolve.
That posture held through May, when the MPC again left the rate unchanged at 28 percent, opting to watch how earlier decisions filtered through the economy. From mid-year, however, the tone changed decisively. In July, the committee delivered a bold 300 basis point cut, followed by an even deeper 350 basis point reduction in September as inflation pressures eased further.
By November 2025, another 350 basis point cut confirmed a clear pivot toward supporting growth, while still keeping an eye on price stability. Together, these decisions set the backdrop for next week’s meeting, where expectations are finely balanced between caution and further relief.
Inflation Continues to Ease, Will it Force a Drop
Inflation has been on a downward path after peaking at painful levels that eroded incomes and savings. Food prices, transport fares, and rent are no longer rising as aggressively as before, and that has offered some breathing space to households.
Although the first inflation figures for 2026 are yet to be released, December 2025 recorded an inflation of 5.4, continuing the disinflation trend.
Will the continuous downward inflation force a cut in the policy rate? Businesses will know by the end of the week. It must also be noted that in order not to spiral inflation out of control, the central bank is also cautious.
The fight against inflation is not yet won, and the Bank of Ghana knows that easing too steep could undo recent gains.
Treasury Bill Rates are Creeping Up
One development that has caught attention is the marginal rise in Treasury bill rates. After declining for a while, yields on short-term government securities have edged up again.
For investors, higher T-bill rates are attractive. For borrowers, they are a warning sign. When government borrowing costs rise, it becomes harder for banks to lend cheaply to businesses and households. Banks often prefer the safety of government paper to lending to the private sector, especially when returns are rising.
This creates a dilemma for the central bank. On one hand, it wants interest rates to come down to support growth. On the other hand, rising T-bill rates suggest underlying liquidity and financing pressures that cannot be ignored.
The Strong Desire for Lower Interest Rates
Across the economy, the call for lower interest rates is growing louder. Small businesses complain that current rates make expansion impossible. Manufacturers argue that high borrowing costs weaken their ability to compete.
A lowered policy rate will send a welcoming signal. It could gradually reduce lending rates through the Ghana Reference Rate, encourage investment, and support job creation. In a country trying to rebuild after economic shocks, this matters deeply.
As indicated earlier, easing the rate sounds good, but it has consequences. If done too aggressively, it can fuel inflation, weaken the currency, and scare investors. The MPC knows this, and that is why expectations are carefully balanced.
The Bottomline
Aside from the inflation and T-Bill rates, there are numerous other factors that the MPC will consider before making a decision. Some of these factors are domestic, while others are external.
Given the need for balancing, the MPC will be walking a tightrope. Too much caution prolongs pain. Too much haste risks reversal.
This week’s decision will show how confident the central bank is that the worst is behind us and that the long road to lower interest rates has truly begun. For now, all eyes are on the MPC conference after the meeting, where one decision could quietly shape the economic mood of the months ahead.
