The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has reduced the policy rate by 350 basis points, bringing it down to 21.5%. The policy rate is the benchmark interest rate at which the central bank lends to commercial banks, and the reduction is aimed at making credit more affordable for businesses and households.
Boost for Lending and Economic Activity
By lowering the cost of borrowing, the central bank expects financial institutions to extend cheaper loans to the private sector. This, according to the BoG, should support business operations, create jobs, and stimulate overall economic growth.
Inflation Outlook Remains Positive
Announcing the decision at a press conference in Accra on September 17, 2025, BoG Governor Dr. Johnson Pandit Asiama explained that most MPC members backed the cut.
“The committee believes that inflation will continue to ease in the short term and, in the outlook, headline inflation is expected to settle within the medium-term target band of eight per cent, plus or minus two, by the end of the fourth quarter,” Dr. Asiama said.
Risks Ahead
The Governor, however, cautioned that potential increases in utility tariffs could pose inflationary risks in the medium term, which might affect the 0 lending, with inflation projected to ease by year-end despite utility tariff risks.
