Middle East tensions, global risks to shape November policy rate decision – BoG Governor

Bank of Ghana Governor Dr Johnson Asiama highlighted Middle East tensions and global economic uncertainty as key factors influencing the central bank's November policy rate decision. Speaking at an investor event in Bangkok, he attributed Ghana's main economic risks to external sources, such as movements in the US dollar, gold prices, tighter financing conditions, and the anticipated effects of El Niño.

Following a unanimous September decision to keep the policy rate at 14%, the Monetary Policy Committee cited external risks and rising inflation concerns as reasons for maintaining the rate. Dr Asiama emphasized that the central bank is closely monitoring international developments, including the US midterm elections in November, to assess their impact on Ghana's economy.

Regarding the banking sector, he assured investors that it remained robust, attributing improvements to regulatory measures and steps to reduce the non-performing loan ratio. In response to a question about 2025 financial results, Dr Asiama explained that the losses should be viewed in the context of stabilizing the economy, with open market operations contributing to bringing inflation down to its current level.

He described the loss as a one-off and expressed confidence in an improved financial position by 2027, with the potential for a surplus in 2032. Additionally, the government has agreed to recapitalise the Bank of Ghana by issuing bonds, with an expected agreement in the coming month.