The Bank of Ghana has slashed its benchmark interest rate by 300 basis points, bringing the policy rate down from 28% to 25%, in a move aimed at supporting growth amid a sustained decline in inflation.
The announcement was made on Wednesday (30 July) by Governor Dr Johnson Asiama, who chairs the central bank’s Monetary Policy Committee (MPC). He confirmed that a majority of the seven-member committee voted in favour of the sharp cut during its latest policy meeting.
“In light of recent developments in the inflation outlook and broader macroeconomic conditions, the MPC has voted by majority to lower the policy rate to 25.0%,” Dr Asiama told reporters in Accra.
The cut marks one of the most significant rate adjustments in recent years and reflects the central bank’s growing confidence in the disinflationary trend. Ghana’s inflation rate currently stands at 13.7%, following a series of month-on-month declines.
The Governor signalled that more rate reductions could follow if price pressures continue to ease.
“The Committee will continue to assess incoming data and may ease the policy stance further should the disinflation momentum persist,” he said.
Despite the optimistic tone, Dr Asiama warned of persistent upside risks to the inflation outlook, including potential global supply chain disruptions and pending utility tariff adjustments.
However, he stressed that these risks would likely be mitigated by tight monetary policy and ongoing fiscal consolidation efforts.
The policy rate is the central bank’s primary tool for controlling inflation and influencing lending rates across the economy.
Lower rates typically aim to stimulate economic activity by making credit more affordable for businesses and consumers.
Dr Asiama reiterated the MPC’s commitment to maintaining price stability while fostering conditions conducive to inclusive and sustainable growth.