The Monetary Policy Committee (MPC) of the Bank of Ghana has cut the policy rate by 350 basis points, bringing it down from 25% to 21.5%.
The decision was announced by Governor Dr. Johnson Asiama following the committee’s 126th meeting held on September 17, 2025.
Dr. Asiama explained that the committee’s decision was driven by an improving inflation outlook.
He stated that inflation is expected to continue easing in the near term, with projections showing headline inflation falling within the medium-term target band of 8% ±2% by the end of the fourth quarter.
However, the Governor cautioned that certain risks remain.
A potential upward adjustment in utility tariffs could introduce inflationary pressures in the medium term.
For instance, the Electricity Company of Ghana (ECG) has submitted a proposal to the Public Utilities Regulatory Commission (PURC) for a 225% increase in its Distribution Service Charge.
Despite these concerns, the majority of MPC members voted in favour of the rate cut, citing the need to support economic growth while maintaining price stability.
On the currency front, Dr. Asiama reaffirmed the strength of the Ghana cedi, noting that it remains one of the best-performing currencies globally in 2025.
He attributed this resilience to prudent monetary policy, tight liquidity management, fiscal consolidation, and increased foreign exchange inflows.
“The cedi’s performance reflects the Bank’s commitment to stability. We are closely monitoring the currency and are prepared to implement the necessary regulatory measures to maintain its strength,” he said.
This significant policy rate cut signals growing confidence in the macroeconomic environment and is expected to ease financing conditions for businesses and households, while supporting Ghana’s ongoing economic recovery.
