BoG Cuts Policy Rate to 14%
By Nii Trebi Hammond
The Bank of Ghana has cut its key policy rate by 150 basis points to 14 percent, signaling a shift toward lower borrowing costs as inflation falls sharply to 3.3 percent.
The decision, announced by Governor Dr. Johnson Asiama at the end of the Monetary Policy Committee (MPC) meeting, reflects growing confidence in the country’s disinflation trend after more than a year of tight monetary policy.
The latest data shows that inflation declined from 5.4 percent in December 2025 to 3.3 percent in February 2026, driven by easing food and non-food prices. Core inflation also moderated, pointing to subdued underlying price pressures.
The rate cut is expected to gradually ease lending conditions, offering some relief to businesses and households that have faced high borrowing costs in recent years. Early signs of this shift are already evident, with Treasury bill rates declining and private sector credit beginning to pick up.
Dr. Asiama noted that inflation expectations remain well anchored across consumers, businesses, and the financial sector, supported by the relative stability of the cedi and improved food supply conditions.
Despite the positive outlook, the central bank warned of emerging risks from global developments, particularly rising geopolitical tensions in the Middle East, which could push up oil prices and threaten the inflation outlook.
“The Committee will continue to closely monitor these developments and take appropriate action if necessary to maintain price stability,” the Governor said.
The policy move marks a turning point in Ghana’s monetary stance, with the central bank cautiously shifting from aggressive tightening to supporting economic activity while safeguarding recent gains in price stability.
The next MPC meeting is scheduled for May 18–20, 2026.
