- Decision
- Lower
- Rate change
- 350 bps
- monetary policy rate
- 21.5%
The Monetary Policy Committee of the Bank of Ghana cut the Monetary Policy Rate by 350 bp to 21.5 percent at its 17 September 2025 meeting, citing eight consecutive months of disinflation and sustained growth alongside a robust external position that is underpinning cedi strength. After lifting the rate to 28 percent in March, the central bank held in May and then reduced it by 300 bp in July before the latest, deeper easing. Money-market yields and average lending rates have already fallen, and the Committee complemented the cut by tightening foreign-exchange management through a new single-currency net open position limit of between 0 percent and –10 percent for banks from 1 October. Headline inflation slowed to 11.5 percent in August from 12.1 percent in July and is projected to reach the 8 ± 2 percent medium-term target by end-2025, while Q2 real GDP expanded 6.3 percent year on year, with non-oil growth at 7.8 percent and the CIEA up 6.1 percent in July. A US$6.2 bn trade surplus for Jan–Aug, reserves of US$10.7 bn (4.5 months of imports) and a 21 percent year-to-date appreciation of the cedi illustrate external resilience. The MPC noted firmer global growth and easier financing conditions but flagged lingering geopolitical and trade-related risks. It pledged to monitor developments closely and stands ready to act to safeguard the disinflation trajectory, while cautioning that potential utility-tariff hikes could add medium-term price pressure.
Rate evolution
From July 2025 to March 2026, the Bank of Ghana cut the Monetary Policy Rate by 1,100 basis points from 25.0 percent to 14.0 percent, delivering a rapid easing cycle before pausing in May 2026 and maintaining that stance in July and September 2026. The cuts were initially driven by a sharp and broad-based disinflation, declining core inflation, anchored inflation expectations, cedi appreciation, strong fiscal consolidation and a marked strengthening in external buffers, while firming economic activity and high real interest rates gave the Committee scope to support recovery. As the cycle progressed, the Committee increasingly framed policy as shifting from restoring stability to consolidating macroeconomic gains, supporting real sector recovery, job creation and financial intermediation, even as it continued to flag risks from utility tariff adjustments, commodity-market volatility and global uncertainty.
After the final cut in March 2026, the Committee held at 14.0 percent in May and again in July, first judging risks to inflation and growth as broadly balanced because headline inflation remained below target, core pressures were still easing and domestic spillovers were muted, and later concluding that the current stance remained appropriate to guide inflation into the medium-term target band while allowing time to assess evolving geopolitical developments and their potential impact on the domestic economy. In July, it noted that headline inflation had risen to 5.3 percent in June from 3.7 percent in May, largely on base effects and a temporary increase in transport fares following higher crude oil prices, while core inflation and inflation expectations also increased but remained broadly within the target band, against a backdrop of stronger domestic growth, higher private sector credit growth, continued fiscal consolidation and adequate reserve buffers. In September, it unanimously maintained the rate at 14.0 percent and again judged risks to inflation and growth as broadly balanced, noting that headline inflation rose to 5.0 percent in August from 4.6 percent in July on utility tariff pass-through and high crude oil prices but remained below the lower bound of the medium-term target band, while core inflation and inflation expectations eased, growth remained resilient, and fiscal consolidation, improved food supply and exchange-rate stability presented offsetting downside risks.