- Decision
- Lower
- Rate change
- 150 bps
- monetary policy rate
- 14%
The Bank of Ghana’s Monetary Policy Committee reduced the Monetary Policy Rate by 150 bp to 14.0 % on 18 March 2026, judging that firmly declining inflation, solid economic momentum and elevated real rates create room for further easing even as higher oil prices and heightened Middle East tensions pose upside risks to prices. Having lifted the rate to 28 % in March 2025, the MPC has since delivered successive cuts—most recently moving from 15.50 % in January to the current 14.0 %. No changes were announced to the operating framework. Headline inflation fell sharply to 3.3 % in February from 5.4 % in December, core pressures are muted and the central bank projects inflation to stay within its medium-term target band. Real GDP grew by 6.0 % in 2025, non-oil output by 7.6 %, and the Composite Index of Economic Activity accelerated to 8.4 % y/y in January, while average bank lending rates declined to 19.2 % and the NPL ratio improved to 18.7 %. Externally, a USD 3.7 bn trade surplus in January–February and reserves of USD 14.5 bn (5.8 months of import cover) underpinned cedi stability and a planned reserve-accumulation programme targets 15 months’ cover by 2028. The Committee noted that the Middle East conflict is disrupting supply chains, fuelling oil-price volatility and could tighten global financing conditions. It pledged to monitor these developments closely and stands ready to adjust policy to safeguard price stability.
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.