Ghana Central Bank Weighs Further Rate Cut as Inflation Falls Faster Than Expected

Ghana’s central bank is considering an additional interest rate cut as inflation declines more rapidly than anticipated, pushing real borrowing costs higher and potentially slowing momentum in the country’s economic recovery. The Monetary Policy Committee (MPC) lowered the policy rate by a record 350 basis points to 21.5 percent in September, signaling cautious optimism but emphasizing the need to protect recent disinflation gains.

Governor Johnson Asiama expects consumer inflation to fall to between 4 and 6 percent by the end of the year, stabilizing around the 8 percent target band in 2026. Inflation dropped to 6.5 percent in November from 8.0 percent in October, a sharper decline than forecast. As nominal rates remain unchanged while prices cool, real interest rates have risen, increasing borrowing costs for households and businesses. MPC staff analysis suggests scope for gradual easing, but maintaining policy credibility remains a priority.

Ghana’s economy continues to recover from its deepest crisis in a generation, posting 6.3 percent growth in the first half of 2025. International reserves stand at $11.41 billion, the cedi is broadly stable, and foreign-exchange operations have strengthened price stability. Still, high real rates risk tightening credit conditions for sectors dependent on financing, making the next MPC decision a critical inflection point.

The central bank’s challenge lies in easing policy without undermining progress on inflation control. With inflationary pressures cooling, stable FX conditions, and improving macroeconomic indicators, the window for calibrated rate cuts is widening. However, the MPC must balance growth support with the need to anchor expectations in a still-fragile environment.

‍