Majority of MPC Members Back 150bps Rate Cut to 14%

A majority of members of the Monetary Policy Committee (MPC) of the Bank of Ghana voted in favour of a 150 basis points reduction in the policy rate to 14.0%, reflecting a strong inclination toward monetary easing despite prevailing external risks.

Details captured in the MPC decision report show that four out of the six members supported the 150bps cut, while one member advocated a more cautious 75 basis points reduction. The remaining member preferred to maintain the policy rate at 15%, highlighting a divergence in views on the pace of easing.

Balancing Growth and Inflation Risks

The majority decision underscores growing confidence in Ghana’s disinflation path and improving macroeconomic conditions. However, committee members also expressed concerns about emerging external risks, particularly developments in the Middle East and their potential impact on inflation.

One MPC member pointed to rising international crude oil prices as a key downside risk, warning that higher global energy costs could transmit into domestic ex-pump fuel prices and potentially reverse recent gains in inflation control.

“This could, however, be moderated by continued commitment to fiscal discipline, relatively tight monetary policy, and exchange rate stability,” the member noted.

Call for Caution Amid Global Uncertainty

Another member acknowledged the strong case for rate cuts but urged a more measured approach, citing broader macroeconomic risks linked to geopolitical tensions.

“The case for cutting is strong at this MPC round, but material upside risks to inflation warrant a calibrated, rather than aggressive approach,” the member argued.

Concerns were also raised about the potential spillover effects of global instability on Ghana’s economy, including implications for inflation, economic growth, utility tariffs, and the overall cost of credit.

Emerging Consensus Despite Divergence

Despite differing views on the magnitude of the rate adjustment, there appeared to be broad consensus among MPC members on the need for some level of monetary easing to support economic recovery.

The split vote reflects the delicate balancing act facing policymakers, supporting growth and credit expansion while guarding against inflationary pressures and external shocks.

Policy Outlook

The decision signals that the Bank of Ghana is gradually shifting toward a more accommodative monetary stance, albeit cautiously. Analysts suggest that future rate decisions will depend heavily on inflation trends, exchange rate stability, and global economic developments.

With risks from oil prices and geopolitical tensions still looming, the pace of further easing is likely to remain measured, as the central bank seeks to preserve macroeconomic stability while supporting growth.