BoG cuts policy rate to 21.5% amid easing inflation

The Bank of Ghana (BoG) has lowered its Monetary Policy Rate (MPR) by 350 basis points to 21.5 percent, citing falling inflation and strong economic growth.

Governor Dr. Johnson Asiama said the Monetary Policy Committee noted “headline inflation declined further to 11.5 percent in August 2025, the lowest reading in four years,” driven by prudent monetary policy, cedi appreciation, fiscal consolidation, and improved food supply.

On growth, Dr. Asiama highlighted robust performance in services and agriculture. “The economy posted a real GDP growth of 6.3 percent in Q2 2025, up from 5.7 percent a year earlier. Excluding oil, GDP grew 7.8 percent,” he said.

Interest rates have eased, with the 91-day treasury bill yield dropping from 13.4 percent in July to 10.3 percent in August, while average lending rates fell from 26.6 percent to 24.2 percent.

The external sector also strengthened, recording a trade surplus of US$6.2 billion in the first eight months of 2025, up from US$2.1 billion in 2024. Dr. Asiama noted, “Gross International Reserves stood at US$10.7 billion, equivalent to 4.5 months of import cover.”

The cedi has appreciated 21 percent against the US dollar this year, reflecting “prudent monetary policy, effective liquidity management, fiscal consolidation, and increased foreign exchange inflows,” he added.

The MPC also revised banks’ Net Open Position limits, moving the single currency NOP from ±5 percent to between 0 percent and –10 percent, effective 1 October 2025.

“The Committee will continue to monitor macroeconomic developments and take appropriate policy decisions to reinforce the disinflation process,” Dr. Asiama concluded.