The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has reduced the policy rate by 350 basis points, bringing it down from 25% to 21.5%. The decision was announced by the Governor of the Bank, Dr Johnson Asiama, following the MPC’s 126th meeting on Wednesday, 17 September 2025.
At a press briefing, Dr Asiama explained that the reduction was informed by the current state of the economy, inflation trends, the performance of the cedi, and the potential impact of an upward review of utility tariffs.
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He stated:
On the back of the strong external sector performance and increased reserve accumulation, the cedi strengthened against the major trading currencies in the year to July 2025.
BoG’s Monetary Policy Committee cuts policy rate from 25% to 21.5%
Highlighting the resilience of the currency, he continued:
Subsequently, the cedi came under some demand pressure, bringing the cumulative appreciation through 12 September 2025 to 21.0% against the US dollar. And let me point out that the cedi remains among the strongest currencies globally year to date. This reflects prudent monetary policy, effective liquidity management, fiscal consolidation, and increased foreign exchange inflows.
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Looking ahead, Dr Asiama projected further reductions in inflation:
So, given the current state of macroeconomic conditions, the view of the committee was that inflation will continue to ease in the near term. In the outlook, headline inflation is expected to drop within the medium-term target of 8% ± 2% by the end of the fourth quarter.
He cautioned, however, that potential adjustments in utility tariffs could place some pressure on prices in the medium term. He added:
Notwithstanding this, the maintenance of an appropriate monetary policy stance informed the decision to lower the policy rate by 350 basis points to 21.5%.
The Governor assured that the committee would continue to monitor macroeconomic developments and take policy actions when necessary to reinforce the disinflation process.
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The reduction of the policy rate is expected to ease the cost of borrowing for businesses, making credit more affordable and accessible. With lower interest rates, companies can secure loans at reduced costs to finance expansion, invest in new projects, or strengthen working capital.
