- Decision
- Lower
- Rate change
- 250 bps
- monetary policy rate
- 15.5%
The Bank of Ghana’s Monetary Policy Committee lowered the Monetary Policy Rate by 250 bp to 15.50 percent, judging that a sharp decline in headline inflation to 5.4 percent in December 2025, well-anchored expectations and robust growth momentum allow some easing while monetary conditions remain tight in real terms. After raising the rate to 28.0 percent in March 2025, the Committee has since delivered cumulative cuts of 1,650 bp through July, September, November and now January. No new operational changes were announced, but the statement highlights that reserve-money growth slowed to 12.5 percent, the 91-day Treasury-bill yield fell to 11.08 percent and real private-sector credit growth rebounded to 13.1 percent. Real GDP grew 6.1 percent in the first three quarters of 2025, the Composite Index of Economic Activity rose 8.8 percent in November and the banking sector remains solvent with the NPL ratio down to 18.9 percent. Externally, a US$9.1 billion current-account surplus and reserves of US$13.8 billion (5.7 months of import cover) supported a 40.7 percent appreciation of the cedi in 2025. The Committee expects inflation to stay within the medium-term target but will watch risks from potential utility price increases and commodity-price volatility and stands ready to act to safeguard recent macroeconomic gains.
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.