MPC Rate Cut at 18% to Bring Relief to Businesses and Households
By Praisebell Rosemond Larbi
Ghanaian businesses, consumers, and households are set to benefit from lower borrowing costs, improved credit access, and eased financial pressures following the Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) decision to slash the policy rate by 350 basis points to 18 percent, down from 21.5 percent. The move, announced on Wednesday, November 26, 2025, is expected to lower lending rates, reduce the cost of consumer credit, stimulate private-sector activity, and create a more supportive environment for investment and job creation.
Addressing journalists at the BoG headquarters in Accra, Governor Dr. Johnson Asiama said the majority of MPC members supported the unusually large reduction, citing a significantly improved inflation outlook, moderating risks, and the need to bolster Ghana’s ongoing economic recovery.
“The Bank projects a continued stable inflation profile around the target and well into the first half of next year, 2026. This is against the backdrop that current risks in the outlook to shift the path of inflation away from target have moderated significantly,” Dr. Asiama said.
Analysts note that the scale of the rate cut signals growing confidence in macroeconomic stability after two years of tight monetary policy aimed at curbing inflation. With headline inflation now within the target band, the Bank sees room for a more accommodative stance that encourages lending, consumption, and investment.
Dr. Asiama highlighted that real interest rates remain relatively high even after the cut, providing space for further easing if inflation remains favourable. “The prevailing high real interest rate provides some hope to ease policy further to boost the current growth recovery efforts,” he added.
Beyond the headline decision, the Governor also announced an operational change in the Bank’s liquidity management strategy. “In addition to the policy rate reduction, the Bank will now return to the use of the 14-day bill as its main instrument for conducting open market operations,” he revealed. The shift is expected to improve short-term liquidity management and enhance the transmission of monetary policy across the banking sector.
Market watchers anticipate that the rate cut will gradually translate into lower lending rates, offering relief to households servicing loans, consumers financing purchases, and businesses seeking working capital. Manufacturing, agribusiness, and service sectors are expected to particularly benefit as credit becomes more accessible and affordable.
Dr. Asiama reiterated the MPC’s commitment to carefully balancing support for growth with the need to maintain macroeconomic stability. “The Bank will continue to monitor developments and take appropriate policy decisions to ensure sound and stable macroeconomic conditions,” he said.
With inflation stabilising, growth momentum picking up, and borrowing costs easing, the central bank’s decisive action marks a pivotal moment in Ghana’s economic recovery, signalling renewed confidence in the country’s medium-term trajectory.
