Ghana’s central bank lowered its key interest rate by the most on record after the pace of inflation significantly slowed in the West African nation and signalled it would continue to ease if the disinflation trend continues.
The monetary policy committee voted by a majority decision to cut rates to 25% from 28%, Governor Johnson Asiama told reporters on Wednesday in the capital, Accra. That matched the median estimate of nine economists in a Bloomberg survey. This is the second MPC meeting this month. An emergency gathering called almost two weeks ago opted to delay publicising any policy decision until this one was held.
“Looking ahead, the committee will continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue,” Asiama said. “The July forecast also shows that headline inflation is expected to decline further in the third quarter of 2025 and trend within the medium-term target of 8% (+/-2 ppts) by the end of 2025, earlier than initial projections.”
Since the MPC last met, inflation has softened to 13.7% from 18.4% in May, largely due to a rally in the cedi against the dollar, and there has been a drastic drop in treasury bill rates.
Reforms under an International Monetary Fund program, tight fiscal control, credit rating upgrades, progress on debt restructuring and a spike in the gold price have boosted foreign-exchange reserves and benefited Africa’s largest bullion producer, underpinning the cedi’s 40% appreciation against the dollar this year.
To maintain the stability of the currency, the nation has been cracking down on awarding government contracts and pricing or paying for goods and services in foreign currency.
