Keypoints:
- Policy rate cut by 250 basis points to 15.5 percent
- Inflation drops to 5.4 percent, lowest in years
- Economists expect further easing in 2026
GHANA’S central bank has cut its benchmark interest rate by 250 basis points to 15.5 percent, its lowest level in four years, as inflation continues to ease and macroeconomic conditions stabilise.
The decision, announced on Wednesday after a meeting of the Bank of Ghana’s Monetary Policy Committee, exceeded market expectations and reinforces confidence that Africa’s leading cocoa and gold producer is emerging from its deepest economic crisis in decades.
The larger-than-anticipated cut reflects Ghana’s sharp disinflation, improving reserves position and progress under its IMF support programme, signalling a shift from crisis containment toward economic recovery.
Economists had forecast a more modest 200 basis point reduction to 16 percent, following a 300 basis point cut in July and record 350 basis point reductions in both September and November.
With the latest move, the Bank of Ghana has now reduced its main lending rate by a cumulative 12.5 percentage points since launching its easing cycle in July last year.
Inflation collapse reshapes policy stance
Bank of Ghana Governor Johnson Asiama said the rate cut was supported by broad improvements across the economy.
‘The macroeconomic conditions have improved significantly,’ Asiama told reporters at a news conference.
He cited tight monetary policy implementation, fiscal consolidation and a significant build-up of foreign exchange reserves as key drivers of stability.
Consumer inflation has fallen dramatically from a record 54.1 percent in December 2022 to 5.4 percent in December 2025 — one of the sharpest disinflation episodes recorded in sub-Saharan Africa.
The central bank’s medium-term inflation target remains 8 percent, with a tolerance band of two percentage points on either side.
Asiama said inflation for the first half of the year was expected to remain broadly aligned with the target range, while economic growth was projected to stay strong into 2026.
However, he cautioned that it was too early for policymakers to consider revising the inflation target itself.
Markets anticipate further easing
Analysts say the decision confirms the central bank’s increasingly dovish stance as it seeks to support growth without reigniting price pressures.
David Omojomolo, Africa economist at Capital Economics, said the Bank of Ghana appeared comfortable accelerating monetary easing.
‘The bank remains keen to support growth against the backdrop of low inflation,’ he said in comments carried by Reuters.
Capital Economics expects at least another 550 basis points of interest rate cuts over the remainder of the year, a forecast that would place Ghana among the most aggressive easing economies globally in 2026.
Lower interest rates are expected to reduce borrowing costs for businesses and households following several years of punitive lending rates that constrained investment and consumer spending.
IMF programme nears completion
Ghana’s economy has been under intense strain since 2022, when rising debt, currency depreciation and global interest rate shocks pushed the country into default.
In response, the government secured a three-year $3bn IMF support programme in 2023, accompanied by domestic debt restructuring and strict fiscal reforms.
Authorities now expect the programme to conclude in August, a milestone widely viewed as critical to restoring investor confidence and improving access to international capital markets.
The stabilisation of the cedi, rising gold exports and improved cocoa earnings have strengthened the country’s external buffers, helping rebuild reserves and reduce balance-of-payments pressures.
Recovery momentum builds
While risks remain — including global commodity volatility and election-year fiscal pressures — economists say Ghana’s policy direction has stabilised.
The central bank’s willingness to exceed market expectations with a deeper rate cut suggests officials believe inflation risks are now manageable.
For businesses and consumers alike, the move marks a symbolic turning point: from survival to recovery.
As Ghana approaches the end of its IMF programme, policymakers appear increasingly focused on restoring growth, expanding credit and rebuilding confidence in one of West Africa’s most important economies.
