Godwin ShaibuThe Bank of Ghana has reduced its policy rate by 350 basis points to 21.5%, aiming to stimulate economic growth as inflation continues to ease in the country, according to media reports.
This decision, announced on Wednesday, marks the second major rate cut in 2025 and reflects the central bank’s confidence in the country’s improving macroeconomic conditions.
Join our WhatsApp ChannelThe move is expected to encourage lending and investment, supporting the ongoing economic recovery.
The Monetary Policy Committee (MPC) of the Bank of Ghana convened for its 126th meeting and voted to lower the policy rate from 25% to 21.5%. Governor
Dr. Johnson Asiama explained that the decision was driven by a sustained decline in inflation and positive economic indicators.
“Given the current state of macroeconomic conditions, the view of the committee was that inflation would continue to ease in the near term,” Governor Asiama stated. “In the outlook, headline inflation is expected to drop to within the medium-term target of 8% ± 2% by the end of the fourth quarter.”
As of August 2025, Ghana’s headline inflation had fallen to 11.5%, the lowest level since October 2021. This marks the eighth consecutive month of declining inflation, indicating a steady disinflationary trend.
The central bank’s decision also comes amid positive economic growth. The country’s GDP expanded by 6.3% year-on-year in the second quarter of 2025, driven
notably by the services sector. This growth, coupled with easing inflation, has bolstered confidence in the Ghanaian economy.
However, the central bank remains cautious about potential risks. Governor Asiama noted that any upward adjustment in utility tariffs could create price pressures in the medium term, potentially affecting the inflation outlook.
The Bank of Ghana has indicated that it will continue to monitor economic indicators closely and adjust its monetary policy as needed to ensure sustainable economic development.
