Analysts Backs Fitch Outlook, Predict Sharp 3.5% Policy Rate Cut in January
By Praisebell Rosemond Larbi
Analysts and financial market observers are increasingly backing Fitch Solutions’ projection that the Bank of Ghana (BoG) will implement a steep cut to its Monetary Policy Rate (MPR) when the Monetary Policy Committee (MPC) convenes in January 2026. Many expect a decisive 350-basis-point reduction, which would bring the rate down from the current 18% to about 14.5% in response to Ghana’s rapidly improving macroeconomic conditions.
The growing consensus follows a sustained decline in inflation and greater stability in the country’s financial environment. November inflation fell to 6.3%, its lowest in years, while the Ghana Reference Rate (GRR) for December now stands at 15.93%. Lending rates, which continue to average between 21% and 22%, remain significantly above both inflation and the GRR, creating a widening gap that analysts believe can no longer be justified under prevailing economic conditions.
Finance and Tax Analyst Nelson Cudjoe Kuagbedzi, speaking to in a media interview on Tuesday, December 9, 2025, argued that the current data gives the central bank considerable room to loosen its monetary policy stance more boldly than in previous cycles.
“For November, inflation was 6.3 percent, policy rate was at 18 percent, the Ghana Reference Rate is around 15.93 percent, and lending rates hover between 21 and 22 percent. Clearly, there is a huge gap between inflation and the policy rate,” he explained.
He added that a 350-basis-point cut would be both appropriate and beneficial for the economy. “Once this happens, lending rates should decline, allowing for credit expansion to the private sector, which needs cheaper funds for growth and sustainable job creation.”
Market watchers note that a deeper rate cut, beyond the moderate reductions seen earlier in 2025 could significantly ease the cost of borrowing, incentivise banks to lend more, and unlock much-needed capital for businesses still recovering from years of economic pressure. With inflation stabilising well within the medium-term target band and the cedi experiencing stronger performance in recent months, analysts argue that the conditions are ideal for a shift toward growth-supporting monetary policy.
They also emphasise that a lower policy rate would help align Ghana’s interest-rate environment with the broader macroeconomic outlook, reinforcing confidence among businesses and investors. As January approaches, all eyes will be on the MPC to see whether it will match the market’s bold expectations or adopt a more cautious approach.
