Monetary Policy Committee Cuts Policy Rate to 23% as BoG Signals Confidence in Economic Turnaround

ACCRA, Ghana —The Bank of Ghana (BoG) has reduced its Monetary Policy Rate (MPR) to 23%, marking a decisive step toward monetary easing as inflation continues to fall within target and the cedi shows sustained stability.

Governor Dr. Johnson Pandit Asiama, announcing the outcome of the 127th Monetary Policy Committee (MPC) meeting, said the decision reflects Ghana’s “most stable macroeconomic conditions in several years.” Inflation currently stands at 8.0%, core inflation between 5–7%, and gross reserves at US$11.41 billion, equivalent to 4.8 months of import cover.

“The economy has turned a decisive corner,” Dr. Asiama declared. “Inflation is not only back within the target band but has eased faster than anticipated. The exchange rate has remained broadly stable, external buffers are strong, and the real sector is showing signs of sustained revival.”

According to the governor, Ghana’s economy grew 6.3% in the first half of 2025, led by services and agriculture, while non-oil GDP surged to 7.8%. Business and consumer confidence indices remain positive, supported by robust foreign exchange reforms and fiscal discipline under the 2026 Budget framework. “The negative output gap is narrowing,” he said. “The economy is gradually shifting from recovery to expansion.”

The BoG forecasts real GDP growth will continue its upward trajectory through 2026, driven by a strong harvest season, improved food supply, and easing credit conditions. Inflation is expected to settle between 4–6% by year-end before stabilizing within the target band in 2026.

Meanwhile, Dr. Asiama outlined three critical focus areas guiding the committee’s policy stance which includes managing the pace of disinflation and real interest rates. As inflation cools faster than expected, the governor cautioned that “any easing must preserve credibility and avoid undermining disinflation gains.” The BoG’s new FX operations framework has improved transparency and confidence, but the governor emphasized the need to educate the public and diversify reserve assets, especially to reduce gold concentration risks.

While the banking sector remains sound, Dr. Asiama acknowledged “asset quality and recapitalization risks for a few institutions” that must be addressed to maintain a healthy credit channel for growth.“Our task is to protect this stability while supporting real-sector recovery,” he concluded. “Our decisions must reinforce confidence, signal predictability, and keep the economy on its path toward higher, job-rich growth.” he reiterated.

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