BoG cuts policy rate by 300bps to boost economic recovery

By: Rebecca Okine

The Bank of Ghana (BoG) has cut its benchmark policy rate by 300 basis points from 28 percent to 25 percent in a bold move aimed at supporting economic recovery and easing borrowing costs.

This marks the steepest reduction in recent years and comes amid sustained progress in Ghana’s macroeconomic environment.

Announcing the decision at the 125th Monetary Policy Committee (MPC) press briefing in Accra, Governor Dr. Johnson Asiama said the rate cut reflects growing confidence in the disinflation process and improving economic fundamentals.

Headline inflation now stands at 13.7 percent, down significantly from previous highs.

The Central Bank attributes the decline to improved coordination between fiscal and monetary authorities, as well as ongoing economic reforms.

“The decision reflects our confidence in the disinflation process and the country’s improving macroeconomic conditions,” Dr. Asiama noted.

The MPC said the reduction is expected to ease lending rates, lower the cost of credit, and stimulate private sector investment, particularly in key growth-driving sectors.

Economists and market analysts have welcomed the move, describing it as a strong endorsement of Ghana’s economic trajectory.

They also pointed to renewed stability in the cedi and disciplined fiscal management as key factors that created room for monetary easing.

The Central Bank, however, emphasized that it remains cautious and will continue to monitor inflation trends and broader economic indicators to ensure price stability is maintained.

The MPC reaffirmed its readiness to adjust the policy stance if inflationary pressures resurface.