Ghana has recorded its lowest Monetary Policy Rate (MPR) in four years, following a 250-basis-point reduction by the Monetary Policy Committee (MPC) of the Bank of Ghana to 15.5 per cent.
The last time the policy rate was lower was in July 2021, when it stood at 13.5 per cent, before successive increases that peaked at 30 per cent in September 2023, with some fluctuations in 2024.
At the 128th MPC press briefing in Accra, Dr Johnson Pandit Asiama, Governor of the Bank of Ghana, said the reduction from 18 per cent to 15.5 per cent was aimed at ensuring that recent macroeconomic gains translated into sustainable economic growth.
He said the decision followed an easing of the policy rate by a cumulative 900 basis points in 2024, which led to a reduction in average lending rates to 20.5 per cent from 30.25 per cent.
“With stability largely achieved, the focus of policy is gradually shifting towards consolidating these gains and supporting stronger real sector recovery, job creation, and improved financial intermediation,” he said.
Dr Asiama assured that the Committee would continue to monitor developments closely and take appropriate policy actions to ensure that macroeconomic stability is translated into sustainable growth.
He said the decision was taken by a majority vote of the Committee during its first meeting for 2026, as both global and domestic indicators showed strong performance in 2025 with positive signals for 2026.
Dr Asiama said the latest forecasts and surveys on inflation expectations indicated that headline inflation was expected to remain within the medium-term target band of eight percent, plus or minus two percentage points.
“This is barring potential spillover risks from upward adjustments in utility prices and volatility in commodity markets, with Gross Domestic Product (GDP) growth expected to remain strong in 2026 as the output gap narrows,” he said.
Dr Asiama noted that while emerging developments could introduce moderate demand-side pressures, the Committee judged that current monetary conditions remained tight relative to prevailing inflation dynamics.
He called for sustained vigilance through disciplined fiscal policy, strong policy coordination, and targeted agricultural interventions to contain food inflation, while monitoring heightened geopolitical tensions.
The BoG Governor said headline inflation declined sharply from 23.8 per cent in December 2024 to 5.4 per cent in December 2025.
He described the disinflation process as broad-based, supported by tight monetary policy, fiscal consolidation by Government and the appreciation of the cedi against major trading currencies, particularly the United States dollar.
“Fiscal operations for the period up to November 2025 reflected continued consolidation, with the overall fiscal deficit on a commitment basis at 0.5 per cent of GDP, significantly below the target of 3.5 per cent,” he said.
The primary balance on a commitment basis recorded a surplus of 2.8 per cent of GDP compared with a target of 0.6 per cent, while public debt declined to 45.5 per cent of GDP at the end of November 2025, down from 63.1 per cent a year earlier.
Dr Asiama also cited Ghana Statistical Service (GSS) data showing that real GDP expanded by 6.1 per cent during the first three quarters of 2025, compared with 5.8 per cent over the same period in 2024.
On the global front, he said headline inflation had gradually moved towards central bank targets, reflecting sustained declines in oil and food prices, easing underlying inflation, and well-anchored expectations.
Dr Asiama said global financing conditions had eased considerably in both advanced and emerging market economies, supported by expectations of policy easing by central banks, increased risk appetite, and depreciation of the US dollar.
He said those global developments were expected to support the domestic economy as growth recovery gained momentum in 2025, driven mainly by the services and agriculture sectors.
GNA
