The Monetary Policy Committee (MPC) of the Bank of Ghana may cut the policy rate by 300 basis points to 25%.
This is due to a sharp fall in inflation in June 2025 to 13.7%.
“We maintain a dovish outlook for the July MPC meeting, raising our expected cut in the policy rate to at least 300bps [basis points] from our initial anticipation of at least 200bps cut”, IC Research said.
With the real policy rate widening to 14.3% in June 2025 as against 9.6% in May 2025 and core inflation firmly in single digit, IC Research thinks the MPC has room for a deeper cut beyond its revised call.
“However, we opt to stay cautious on the expected dovishness in order to consolidate FX stability and avert a second-round effect from likely higher fuel levy in 3Q2025 [quarter 3, 2025), it added.
The MPC of the Bank of Ghana maintained the policy rate at 28% in May 2025, citing the need to consolidate gains made in controlling inflation and supporting currency stability.
According to the Governor Dr Johnson Asiama, the decision was driven by the central bank’s latest forecast, which indicated a continued easing of inflationary pressures, supported by a tight monetary policy stance, relative exchange rate stability, and ongoing fiscal consolidation.
Yields and lending rates have fallen since the last MPC meeting, indicating a likely cut in the policy rate.
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