The Monetary Policy Committee (MPC) of the Bank of Ghana has announced a 300 basis points cut in the policy rate from 28% to 25%. This represents the first change to the policy rate since the hike from 27% to 28% in March this year.

The MPC justified the cut by pointing to the decline in headline inflation from 18.4% in May to 13.7% in June. They attributed this to the tight monetary stance, fiscal consolidation, improvement in food supply constraints, and the strong performance of the Ghana cedi.

A survey of Ghanaian analysts and economists had expected a cut anywhere from 300-500bps based on the strong disinflation trend. Inflation has fallen to 13.7%, the lowest rate recorded since December 2021. Complicating any forecast however, are the recent BoG 56-day bill auctions that have departed from their usual interest rate equivalent to the policy rate.

The chart below shows the divergence that has been witnessed over the last month:

The next MPC meeting is scheduled for September 15, 2025.