BoG cuts monetary policy rate to 18%

The Bank of Ghana’s Monetary Policy Committee (MPC) has announced a 350-basis point cut in its monetary policy rate, reducing it from 21.5% to 18%, marking the lowest rate since March 2022.

According the Governor of the central bank, Dr. Johnson Asiama, this substantial rate cut was supported by a majority vote from committee members following the conclusion of its 127th meeting on November 25.

Announcing the decision to the press the Bank’s headquarters on Wednesday, November 26, the BoG Governor explained that the committee is confident of maintaining price stability in the economy, aiming to keep inflation in the 8.0±2 target band.

“The bank projects a continued stable inflation profile around the target and well into the first half of next year, 2026. This is against the backdrop that current risks in the outlook to shift the path of inflation away from target have moderated significantly”, he said.

He further noted that the existing high real interest rates provide an opportunity to ease monetary policy, thereby supporting ongoing growth recovery efforts.

“Taking these factors into account, the committee has decided, by majority vote, to lower the monetary policy rate by 350 basis points to 18.0%,” Dr. Asiama announced, and assured that the committee will continue to closely monitor economic indicators and will make necessary policy adjustments to ensure sound and stable macroeconomic conditions.

“We have one more measure to implement. In conjunction with the policy rate reduction, the bank will revert to using the 14-day bill as its primary instrument for conducting open market operations,” he added.