The Bank of Ghana’s Monetary Policy Committee (MPC) has lowered the policy rate by 350 basis points to 21.5 per cent after concluding its 126th regular meeting, held from September 15 to 17, 2025. The decision reflects the Committee’s confidence in sustained disinflation and robust domestic economic performance despite lingering global uncertainties.
In its post-meeting briefing, the MPC highlighted that global growth has remained more resilient than earlier projected. Easing tensions from tariff wars, robust first-quarter exports, improving credit conditions, and fiscal expansion in some advanced economies have supported the rebound. Consequently, the International Monetary Fund has revised its 2025 global growth forecast upward to 3.0 per cent from the previous 2.8 per cent.
Global inflation is also projected to ease on the back of lower food and energy prices and a slowdown in employment growth. Financing conditions worldwide have improved with declining policy rates, lower long-term bond yields, and strong portfolio flows into emerging markets. A notable surge in gold prices, driven by these global uncertainties, is expected to bolster Ghana’s external sector position.
Domestically, Ghana’s economy continues to show impressive momentum. According to the Ghana Statistical Service, real GDP growth for the second quarter of 2025 reached 6.3 per cent, up from 5.7 per cent in the same period of 2024. Excluding oil, GDP expanded even faster at 7.8 per cent. The services sector posted a strong 9.9 per cent growth, while agriculture grew by 5.2 per cent.
High-frequency indicators reinforce this positive outlook. The Bank’s Composite Index of Economic Activity recorded an annual growth of 6.1 per cent in July 2025, compared to 1.9 per cent a year earlier, buoyed by gains in international trade, consumption, and industrial production. Confidence surveys in August pointed to sustained improvement, with businesses meeting short-term targets and expecting continued growth. Similarly, the Ghana Purchasing Managers’ Index rose in August, signalling higher new orders and improved business conditions.
These developments have translated into a stronger currency performance. On the back of improved reserves and strong external inflows, the cedi appreciated by a cumulative 21 per cent against the U.S. dollar as of September 12, 2025, ranking among the strongest currencies globally this year.
The MPC expressed optimism that headline inflation will ease to within the medium-term target band of 8 ± 2 per cent by the end of the fourth quarter of 2025, although potential upward adjustments in utility tariffs could exert some price pressure. The Committee affirmed its commitment to maintaining an appropriate monetary stance, supporting fiscal consolidation, and managing liquidity to reinforce the disinflation process.
In addition to the rate cut, the MPC announced a revision of the Net Open Position (NOP) limits for banks. Effective October 1, 2025, the single currency NOP limit will shift from ±5 per cent to a range of 0 to –10 per cent.
The next Monetary Policy Committee meeting is scheduled for November 17–19, 2025, when policymakers will again review macroeconomic conditions and decide on any further adjustments to support stability and growth.
By: Daniel Orlando/newsalertgh.com
