In a decisive move aimed at supporting economic growth and consolidating macroeconomic stability, the Bank of Ghana (BoG) has reduced the Monetary Pol
In a decisive move aimed at supporting economic growth and consolidating macroeconomic stability, the Bank of Ghana (BoG) has reduced the Monetary Policy Rate (MPR) by 350 basis points to 18.0 percent.
The decision was taken at the 127th Monetary Policy Committee (MPC) meeting held from 24th to 26th November 2025.
The central bank also announced a return to the use of the 14-day bill as its primary instrument for conducting Open Market Operations (OMO), replacing the previous 56-day instrument.
The decision comes against the backdrop of a year marked by strong domestic economic performance and improving global conditions.
Over the past ten months, the headline inflation has fallen steadily, dropping from 23.8 percent at the end of 2024 to 8.0 percent in October 2025, hitting the Bank’s medium-term target.
This represents the tenth consecutive month of disinflation, driven by a combination of tight monetary policy, fiscal consolidation, currency appreciation, and favorable food prices.
Core inflation has also eased, with expectations well-anchored, signaling broad-based moderation in price pressures.
Domestic economic indicators have reflected a robust recovery.
The country’s GDP grew by 6.3 percent in the second quarter, supported by strong performances in the services and agricultural sectors. High-frequency data, including the Q3 Composite Indicator of Economic Activity (CIEA), recorded a 9.6 percent year-on-year growth, up from 2.9 percent in the prior year.
Consumer and business confidence surveys further indicate optimism in economic prospects.
The external sector has been resilient, driven by strong gold and cocoa export earnings.
Ghana recorded a current account surplus of US$3.8 billion by the end of September 2025, compared with US$553.7 million in the same period last year.
The country’s gross international reserves rose to US$11.4 billion, providing 4.8 months of import cover and supporting the cedi, which appreciated by over 32 percent year-to-date against the US dollar.
Banking sector stability has also improved, with gains in profitability, solvency, and efficiency.
The capital gap in undercapitalized banks has narrowed, while non-performing loans have eased marginally, though asset quality remains a concern.
Private sector credit growth has shown gradual improvement, although high real interest rates continue to limit credit expansion.
At the MPC meeting, members highlighted both global and domestic considerations.
Globally, the International Monetary Fund projects growth of 3.2 percent in 2025 and 3.1 percent in 2026, with headline inflation moderating. Oil prices have declined amid subdued demand and increased OPEC+ supply, though geopolitical risks could reverse gains.
Domestically, the BoG emphasized the need to consolidate external buffers, maintain exchange rate stability, and support the ongoing economic recovery.
MPC members individually proposed varying reductions in the MPR, ranging from 17.0 percent to 18.5 percent, reflecting the improved inflation outlook, strong reserve buffers, and sustained currency stability.
The majority consensus favored a 350-basis-point reduction to 18.0 percent, while retaining flexibility for further adjustments in the January 2026 MPC meeting if disinflation continues.
The Bank of Ghana’s policy decision underscores its commitment to maintaining price stability while fostering economic growth, ensuring that monetary conditions remain supportive amid a favorable macroeconomic environment.
The next Monetary Policy Decision will be announced after the MPC meetings scheduled for January 2026.
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