At the 127th MPC meeting held on November 26, 2025, Governor Johnson Asiama told his colleagues: “the data before us paints a very different picture from where Ghana stood barely a year ago.” According to him, headline inflation is now down to 8.0 percent, core inflation measures sit between 5–7 percent, and “expectations remain anchored.” The cedi has held broadly stable through the year, external buffers are strong, and real-sector activity is showing renewed strength.

Asiama pointed to robust reserve accumulation gross reserves now stand at US$11.41 billion, equivalent to about 4.8 months of import cover a figure projected to rise to five months by year end. He argued that “the initial conditions for this meeting are the strongest we have had in several years.” On the growth side, non-oil GDP is expanding, business and consumer sentiment is up, and high-frequency economic indicators suggest the negative output gap is narrowing a shift from recovery into expansion.

In light of this improved backdrop, the Committee voted to reduce the policy rate by 350 basis points to 18.0 percent. This marks the third major rate cut in 2025 alone, as the BoG moves to support the resurrection of private-sector credit, business activity, and broader economic growth, while still guarding price and financial stability. 

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What some of the key insights tell us

In the words of the Governor, “the economy has turned a decisive corner,” it underscores just how far Ghana’s macroeconomic conditions have come: from a period of crisis and uncertainty, to one where inflation, reserves, and exchange rate growth are all aligned in the right direction. That statement and the numbers behind it signal renewed confidence not just within the central bank, but for investors, businesses and ordinary Ghanaians.

This bold move suggests that today’s economic environment is stable enough to allow a sharp rate cut that would give the private sector some breathing room to borrow, invest and create jobs. In effect, it carries with it an implicit promise that the stability achieved is real, and policymakers believe now is the time to expand and flourish.

This kind of framing projects a broader restoration of confidence. Reassuring markets and the public that, though policy moves are gradual, they are considered and forward-looking.

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The likely impact

For households, lower borrowing costs could mean cheaper consumer credit, more access to loans for businesses or homes, and slowly easing cost of capital. For companies, cheaper credit and a stable macro environment could encourage expansion, investment, and perhaps new hiring.

It is hoped that the rate cut from 21.5 percent down to 18.0 percent will help to ease borrowing costs gradually, potentially unlocking private-sector credit and spurring investment. With inflation under control and FX reserves strong, the BoG’s goal is to create a stable environment for long-term planning and stability.

Overall, the BoG seems to be striking a balance: using the breathing room created by disinflation and reserve accumulation to support growth, while sending a message that stability and monetary credibility remain core priorities.

Source : Bank of Ghana