The Bank of Ghana (BoG) announced on Wednesday a cut its benchmark policy rate by 300 basis points, following a Monetary Policy Council (MPC) meeting
The decision implies that the rate that commercial banks use as reference for lending has been slashed from 28 to 25 percent, a move many see as the most aggressive rate reduction in recent years, signalling growing confidence in the country’s macroeconomic stability.
Governor of the Bank of Ghana, Dr. Johnson Asiama, observed that the slash in the policy rate is a result of a sustained decline in inflation and a relatively stable currency environment.
“The MPC, by a majority decision, voted to lower the monetary policy rates by 300 basis points to 25%. Looking ahead, the Committee will continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue” the Governor, Dr. Johnson Asiama told the press.
At the 125th monetary policy announcement Dr. Johnson Asiama also admitted that, despite the continuous disinflation process, there are still underlying risks which the Central Bank will be monitoring keenly and make further policy adjustments as needed to safeguard price stability and support sustained economic growth.
Ghana’s inflation rate dropped to 13.7% in July, marking a significant decline from previous highs and underscoring the impact of coordinated monetary and fiscal policies in stabilising prices.
The move is likely to reduce borrowing costs for businesses and households, while signaling growing confidence in the country’s disinflation trajectory.
According to some analysts, the policy rate cut could stimulate private sector investment and further strengthen Ghana’s economic recovery.
The decision comes on the back of a relatively stable foreign exchange market and improved fiscal discipline, both of which have contributed to a more favourable macroeconomic outlook. Enditem
Source: Ghana Eye Report
Share Us
