CPA Projects Monetary Policy Rate to Drop to 15% in 2026

By Praisebell Rosemond Larbi

The Centre for Policy Analysis (CPA) is projecting a sharp decline in Ghana’s Monetary Policy Rate (MPR) to about 15 percent in 2026, signalling what analysts describe as a crucial turning point in the country’s macroeconomic stabilisation efforts. The projection, anchored on a sustained disinflation trend and an improving monetary environment, suggests lower borrowing costs for businesses and households over the medium term.

The policy rate currently stands significantly above 15 percent, but the Bank of Ghana has already cut the benchmark rate by a cumulative 650 basis points in 2025 alone. This aggressive monetary easing, according to experts, reflects growing confidence that inflation after peaking in 2023, has firmly shifted onto a downward path.

Speaking at the CPA’s Post-Budget Discussion held in Accra on Thursday, November 20, 2025, Executive Director of the Centre, Dr. Adu Owusu Sarkodie, said the anticipated decline in the MPR offers Ghana an opportunity to expand credit to productive sectors while easing cost pressures on the business community. He explained that a policy rate within the 10–15 percent range would be the clearest indication yet that Ghana’s inflation management strategy is yielding results.

“The monetary policy rate in the year 2026 is expected to fall below 15 percent, somewhere around 10 and 15 percent. The government is also expected to do little in the open market operations because when you are loosening the monetary environment, the need for frequent open market interventions reduces. The exchange rate is expected to stabilise,” Dr. Sarkodie said.

The CPA’s projection follows a favourable inflation outlook driven by improvements in food supply, lower imported inflation, better FX liquidity, and fiscal consolidation measures outlined in the 2026 Budget. Ghana’s inflation rate, which once surged above 50 percent, has now decelerated to the low double digits, an achievement analysts say is critical to restoring macroeconomic stability, rebuilding investor confidence, and supporting private-sector growth.

Dr. Sarkodie noted that the expected decline in the MPR could have wide-ranging implications for lending behaviour, business expansion decisions, and household consumption patterns. For many firms, particularly in manufacturing, agribusiness, transport, and construction access to cheaper credit remains essential for increasing production, funding inventory, upgrading machinery, and sustaining employment levels.

However, he emphasised that realising the projected policy rate would depend heavily on the government’s ability to maintain strict fiscal discipline throughout 2026. He warned that any deviation from planned expenditure controls, revenue mobilisation strategies, or debt sustainability measures could introduce new inflationary pressures and force the central bank to adopt a tighter monetary stance.

“What is important is that both fiscal and monetary authorities sustain the discipline we have seen so far. If fiscal policy slips, monetary policy will have no choice but to tighten again. The policy rate falling to the range we anticipate will only materialise if inflation continues on its current downward trajectory,” he said.

The potential stabilisation of the exchange rate in 2026, coupled with lower policy rates, could also ease the pressure on import-dependent businesses. Industry leaders have long complained about the dual burden of currency depreciation and high credit costs, which together inflate operational expenses and limit competitiveness.