The Bank of Ghana has announced a significant reduction in the Monetary Policy Rate (MPR), slashing it by 300 basis points from 28% to 25%—its lowest level in over two years.
The central bank made the announcement on Tuesday, July 30, following the conclusion of its 125th Monetary Policy Committee (MPC) meetings.
This bold move signals renewed confidence in Ghana’s economic recovery and is aimed at further stimulating growth while anchoring price stability.
In a statement signed by the Governor of the Bank of Ghana and Chair of the MPC, the central bank cited a marked improvement in macroeconomic conditions, a strong cedi performance, and easing inflationary pressures as key drivers of the decision.
“Given these considerations, the Committee, by a majority decision, voted to lower the Monetary Policy Rate by 300 basis points to 25.0 percent,” the statement read.
The MPC noted that headline inflation fell sharply from 18.4% in May to 13.7% in June 2025—the lowest level since December 2021—driven by tight monetary policy, improved food supply, fiscal consolidation, and the strong appreciation of the cedi.
The cedi has appreciated significantly in 2025, gaining 40.7% against the US dollar, 31.2% against the British pound, and 24.2% against the euro, thanks to higher gold and cocoa export earnings, improved remittance inflows, and a current account surplus of US$3.4 billion in the first half of the year. Ghana’s gross international reserves now stand at US$11.1 billion, equivalent to 4.8 months of import cover.
Real GDP growth also impressed in the first quarter of 2025, reaching 5.3%—with the non-oil sector recording a higher growth of 6.8%. Business and consumer confidence improved, while core inflation indicators also eased across the board.
Budget execution showed that government remained committed to fiscal consolidation, with a deficit of just 0.7% of GDP—well below the target of 1.8%. The country’s total public debt declined from 61.8% of GDP in December 2024 to 43.8% in June 2025, mainly due to the cedi’s appreciation, lower borrowing, and external debt restructuring.
Despite this positive outlook, the Committee acknowledged potential risks, including global trade tensions, possible hikes in utility tariffs, and supply chain challenges. However, it expressed confidence that tight monetary policy and fiscal discipline would help manage those risks.
The Bank of Ghana also indicated that it could further reduce the policy rate in the coming months should the disinflation trend continue.
“The Committee remains committed to the price stability mandate, while creating conditions for inclusive and sustainable growth,” the statement concluded.
The next MPC meeting is scheduled for September 15–17, 2025.
