BoG Expected to Cut Policy Rate Further

The Bank of Ghana (BoG) is expected to cut its policy rate further by about 150 basis points to 14 percent, despite rising geopolitical uncertainties and global economic risks.

This is according to projections by IC Research, which believes there remains significant room for monetary easing following Ghana’s recent disinflation trend.

The research firm estimates that the real policy rate currently stands at 12.2 percent, based on the existing nominal policy rate of 15.5 percent and declining inflation levels.

“While this signals vast scope for deeper cuts, we believe the MPC will favour caution amidst the volatile geopolitical risk events, especially as energy prices surge and the US dollar strengthens,” IC Research noted.

Gradual Easing Expected

According to the firm, the Monetary Policy Committee (MPC) is likely to maintain a cautious but accommodative stance, balancing the need to support economic growth with emerging global risks.

“We thus expect the authorities to sustain the preference for a double-digit real policy rate with a rate-cut bias, pegging our anticipated cut in the policy rate at between 100 and 200 basis points, with a leaning towards a 150 basis points cut to 14.0 percent,” the report added.

The expected rate reduction would mark a continuation of the central bank’s easing cycle, which began earlier this year.

Previous Rate Cut

In January 2026, the MPC reduced the policy rate from 18 percent to 15.5 percent, a move aimed at stimulating economic activity and supporting the recovery process.

The decision was largely driven by faster-than-expected disinflation, improving macroeconomic conditions and strengthening investor confidence.

At the time, the Committee highlighted that inflation expectations were becoming better anchored, while economic growth was gradually picking up.

Balancing Domestic Gains and External Risks

Analysts say the central bank now faces a more complex policy environment, as it must weigh domestic economic improvements against external shocks, including rising global oil prices and currency pressures linked to geopolitical tensions.

The recent escalation in global risks, particularly from developments in the Middle East has heightened concerns about imported inflation, which could limit the pace of monetary easing.

Despite these challenges, IC Research maintains that the underlying disinflation trend provides sufficient room for further rate cuts, albeit at a measured pace.

Outlook

The upcoming MPC decision is expected to reflect a careful balance between supporting growth and maintaining price stability, as policymakers navigate both domestic progress and external uncertainties.

If implemented, the anticipated rate cut could help lower borrowing costs, stimulate private sector activity and reinforce Ghana’s ongoing economic recovery, while still preserving a relatively tight monetary stance in real terms.