Half of MPC Members Push for Policy Rate Cut at January 2026 Meeting
By Praisebell Rosemond Larbi
Half of the members of the Monetary Policy Committee (MPC) of the Bank of Ghana have signalled their intention to support a further reduction in the policy rate when the Committee meets again in January 2026. This position was revealed in the official decision submissions report released by the central bank following the MPC’s latest meeting.
According to the report, three out of the six voting members stated clearly that they expect economic conditions at the end of 2025, particularly inflation performance to justify another policy rate cut. Their forward guidance is grounded in projections that inflation will continue to slow into December 2025, offering room for additional monetary easing.
The Governor of the Bank of Ghana, Dr. Johnson Asiama, reinforced this outlook, indicating that he expects inflation to end the year within the 4–6% band, a level significantly lower than the double-digit inflation rates that characterised the economy just two years ago. Dr. Asiama explained that barring unforeseen shocks, improved domestic supply conditions, relative currency stability, and easing food price pressures will support the disinflation process.
The submission report also disclosed that three MPC members voted for a substantial 350-basis-point cut at the just-ended meeting, which would have lowered the policy rate to 18%. Although the proposal did not carry the majority, it underscores a growing confidence among some committee members that monetary policy can safely transition from its tight stance without jeopardising macroeconomic gains.
Those in favour of the rate cut argued that economic indicators across all major sectors continue to improve. They highlighted stronger fiscal discipline, stabilising inflation expectations, improved business confidence, a more resilient financial sector, and ongoing recovery in private sector credit as signs that the economy could accommodate a more accommodative monetary policy posture.
However, the remaining three members maintained a more cautious view, stressing the need to observe December’s inflation data and global market conditions before taking further action. They warned that premature easing could reignite price pressures, especially as Ghana enters a period of elevated external debt service obligations in 2026.
The January 2026 meeting is therefore expected to be a critical one, as the Committee weighs evidence of sustained disinflation against potential risks such as energy price volatility, exchange rate pressures, or unexpected fiscal slippages.
For now, the split decision reflects a cautiously optimistic outlook: the economy is stabilising, inflation is easing, and the conversation within the MPC is gradually shifting from controlling inflation toward supporting growth. Whether the conditions will be favourable enough to achieve consensus on a rate cut in January remains to be seen, but the signals point to a possible monetary policy shift in early 2026.
