The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has, by majority decision, lowered the Monetary Policy Rate (MPR) by 350 basis points from 25.1 percent to 18 percent, citing sustained economic stability.
The Committee explained that the decision to cut the MPR—the rate at which the central bank lends to commercial banks—was based on strong growth and easing inflation, projected to remain stable through the end of this year and the first half of 2026.
Addressing a news conference in Accra after the 127th MPC meeting, the Governor of BoG noted that the assessment showed broadly improved macroeconomic conditions. He highlighted the expected significant decline in inflation by year-end, tight monetary policy management, and a strong build-up of reserves anchoring exchange-rate stability.
“The Bank projects a continued stable inflation profile around target well into the first half of 2026. Against this backdrop, risks to the inflation outlook have moderated significantly,” the Governor said.
He added that prevailing high real interest rates provided scope for easing the policy stance to support ongoing economic recovery. “Given these considerations, the Committee, by majority decision, voted to lower the Monetary Policy Rate further by 350 basis points to 18.0 percent,” he stated, noting that the MPC would continue monitoring economic developments and take appropriate action to safeguard macroeconomic stability.
As part of additional measures, the Bank announced a return to using the 14-day bill as its main instrument for conducting open market operations.
On the global economy, the Governor said growth remained steady, supported by easing financial conditions and fiscal stimulus, though the outlook remained fragile amid volatile trade dynamics and geopolitical tensions. He also noted that global inflation continued to ease, helped by declining energy and food prices.
Domestically, the Governor said growth momentum was firming, citing provisional data showing a 5.1 percent expansion in August 2025, compared with 4.9 percent in the same month last year, driven largely by services and agriculture sectors. The Composite Index of Economic Activity recorded strong 9.6 percent growth in September, supported by industrial production, international trade, private-sector credit, and consumption.
Dr. Asiama highlighted that inflation had declined steadily, reaching the central target of 8.0 percent in October—the first single-digit outturn since July 2021. He attributed the disinflation to tight monetary policy, sustained fiscal consolidation, a stable currency, and improved food supplies.
BY KINGSLEY ASARE
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