Audio By Carbonatix
Fitch Solutions says the sustainability of Ghana’s macroeconomic recovery remains highly dependent on persistently high gold prices.
According to the UK-based firm, a sharp decline in gold prices - for instance, triggered by a de-escalation of geopolitical tensions - would significantly reduce Ghana’s dollar earnings and deflate its international reserves, placing renewed pressure on the cedi.
In its analysis of the Ghanaian economy, it said a substantial decline in gold prices would drive a sharp rebound in inflation. This will prompt the Bank of Ghana to maintain a tighter policy stance than currently anticipated.
It, however, said it does not expect lower interest rates to put pressure on the exchange rate.
According to the UK-based firm, though in theory, lower interest rates could reduce the attractiveness of cedi-denominated assets, real interest rates will remain comfortably positive.
This suggests that the easing cycle is unlikely to prompt capital outflows.
It said persistently high global gold prices by historical standards will support export earnings and ensure a steady inflow of foreign currency throughout 2026, bolstering the Bank of Ghana’s external buffers and giving it the capacity to stabilise the cedi despite a looser monetary policy stance.
Risk To Outlook
Meanwhile, the risks to the interest rate outlook for Ghana are mixed.
On the downside, Fitch Solutions said the BoG’s 300 basis points rate cut in July 2025 signals a strong willingness to ease policy now that macroeconomic fundamentals have improved largely thanks to elevated gold prices.
“If inflation continued to decline more rapidly than anticipated, the BoG would likely adopt a more accommodative stance than our baseline forecast suggests”, it mentioned.
Latest Stories
-
Republic Bank JoyNews Habitat Fair to connect prospective homeowners with exhibitors in Ho from October 16 to 18
9 minutes -
Obaasima Summit: ‘AI is not a spiritual attack’ — Rev. Dr. Ofori-Boateng urges young women to embrace technology
19 minutes -
GHS to distribute 80,000 pairs of locally-made protective footwear to health workers
26 minutes -
GoldBod boosts local jobs as 90% of gold undergoes refining in Ghana – Sammy Gyamfi
29 minutes -
The search for the politically unblemished: Are we asking the impossible of public appointees?
30 minutes -
Ghana seeks climate finance access for debt-restructuring countries
40 minutes -
Afenyo-Markin urges stronger media scrutiny of public institutions
40 minutes -
GoldBod recovers GH¢38.7m in legacy PMMC debts, targets remaining arrears
42 minutes -
62 out of every 100 commercial meters inspected missing from Ghana Water database – MD
43 minutes -
GoldBod gets BoG authorisation to sell forex, Sammy Gyamfi tells PAC
46 minutes -
Ghana Water revenue mobilisation below 50% of potential – MD
52 minutes -
Ghana’s democracy must accommodate dissent and constructive criticism – Haruna Iddrisu
53 minutes -
Fact check: Trump posts fake quote of Denzel Washington supposedly praising him
54 minutes -
UPSA students lament high fees at private hostels, call for government intervention
1 hour -
We will upgrade Ghana’s credit ratings if government maintains fiscal discipline, policy effectiveness – Moody’s
1 hour