Ghana’s central bank has cut its benchmark lending rate by 250 basis points to 15.5 percent, marking the lowest level since February 2022 and exceeding most economists’ expectations as the country shifts focus toward economic growth following sustained success in controlling inflation. The decision was announced Wednesday after the Monetary Policy Committee (MPC) concluded its 128th regular meeting.
Bank of Ghana Governor Johnson Asiama told reporters that the reduction was approved by majority vote after the committee evaluated recent economic developments and assessed risks to the outlook for inflation and growth. The latest cut builds on an aggressive easing cycle that began in July 2025, when the central bank reduced the policy rate from a peak of 30 percent reached during the economic crisis of 2023.
Most economists surveyed by Reuters had expected the central bank to lower the rate by 200 basis points to 16 percent following record cuts of 300 basis points in July and 350 basis points each in September and November. The cumulative reduction from the 2023 peak now stands at more than 1,450 basis points over approximately 18 months.
Asiama emphasized that despite the reduction, monetary policy conditions remain tight considering the prevailing inflation dynamics. According to the governor, inflation has declined faster than anticipated, with expectations well anchored amid significantly improved macroeconomic conditions supported by tight monetary policy, fiscal consolidation and a significant buildup of reserves.
Ghana’s annual inflation rate, which peaked above 54 percent in December 2022, has steadily fallen back into the central bank’s 6 to 10 percent target range. By October 2025, consumer prices eased to 8 percent, the lowest level in over four years and aligned with the midpoint of the target band. The dramatic improvement reflects improved fiscal management, a stronger cedi and favorable commodity prices.
The central bank expects headline inflation to remain broadly within the medium term target range of 6 to 8 percent, barring potential spillover risks from upward adjustments in utility prices and commodity market volatility. With stability largely achieved, the focus of policy is gradually shifting toward consolidating these gains and supporting stronger real sector recovery, job creation and improved financial intermediation, Asiama explained.
The governor sought to allay fears that the shift toward growth and strong growth expectations for 2026 may introduce demand side pressures on prices. The MPC judged that current monetary conditions remain tight relative to prevailing inflation dynamics, he said. Sustaining Ghana’s macroeconomic gains will hinge on disciplined fiscal policy, strong policy coordination and targeted agricultural interventions to contain food inflation, while remaining vigilant to heightened geopolitical tensions.
Real Gross Domestic Product (GDP) expanded at an annual rate of 6.1 percent during the first three quarters of 2025, compared to 5.8 percent during the corresponding period in 2024, according to the Ghana Statistical Service. Economic growth is projected to remain strong in 2026, with the output gap narrowing, although this may introduce moderate demand side pressures.
The move is expected to further lower borrowing costs across the economy, building on a trend that has already seen average lending rates drop to 20.45 percent from 30.25 percent over the course of 2025. Analysts expect commercial bank lending rates to compress further toward 17 to 20 percent by mid 2026, assuming banks pass through the cuts to customers.
The policy shift has drawn positive reactions from business leaders and analysts. Phoebe Afful, a senior projects evaluation officer at the Petroleum Commission, noted that lower borrowing costs will improve access to credit for businesses and households. The cedi remains stable, reinforcing confidence in Ghana’s macroeconomic outlook. This decision signals a strong commitment to stimulating economic activity while maintaining stability, she said.
The central bank also confirmed that it will shift to using 14 day bills to manage liquidity and improve the transmission of monetary policy. The committee stated it will continue to monitor developments closely and take appropriate policy actions to ensure that gains from macroeconomic stability are translated into sustainable growth.
Ghana’s economic recovery has been supported by an International Monetary Fund (IMF) program that released an additional 385 million United States dollars to the West African country in December 2025, following favorable reviews of reform implementation. The government forecasts a primary budget surplus of 1.5 percent of GDP in 2026, while the overall deficit is forecast to narrow to 2.2 percent from a projected 2.8 percent this year.
Bloomberg data shows the cedi appreciated by about 30 percent against the dollar in 2025, making it one of the best performing currencies globally this year. Gross international reserves rose to 11.1 billion dollars by the end of June 2025, significantly strengthening the country’s external buffers.
