The Bank of Ghana has opted to maintain its benchmark policy rate at 28%, citing persistent inflationary pressures despite recent signs of economic recovery.
The announcement came at the close of the central bank’s latest Monetary Policy Committee (MPC) meeting on Friday, May 23, 2025, and signals a cautious approach aimed at stabilising inflation expectations in the months ahead.
Governor Dr Johnson Asiama told reporters at the Bank’s headquarters in Accra that although the macroeconomic outlook has improved—particularly with a stabilising currency and progress on fiscal consolidation—risks remain.
“Despite these positive developments, the committee observed that the current level of inflation remains high relative to the medium-term target and will require maintaining the policy rate at 28.0%,” he said.
Caution over cuts
Calls from sections of the private sector and industry leaders for a rate cut were not enough to sway the MPC, which warned that easing too early could jeopardise the hard-won gains made in curbing inflation.
Dr Asiama noted that inflation is projected to decline more rapidly than previously forecast, potentially reaching target levels in early 2026 rather than mid-year—so long as no major external shocks disrupt the trend.
“The latest forecast points to continued easing of inflationary pressures on the back of tight monetary policy stance, exchange rate stability, and fiscal consolidation,” he said.
Balancing Act
The decision underscores the BoG’s ongoing challenge of balancing inflation control with the need to stimulate economic activity in a context of fragile recovery. Ghana’s inflation rate, while moderating, remains above the central bank’s target band.
The policy rate—used to guide lending costs across the economy—has remained unchanged since a 100 basis point cut in January.
Analysts expect the bank to adopt a wait-and-see posture over the coming months as it monitors inflation, currency movements, and global commodity prices.
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