Bank of Ghana cuts policy rate to 21.5%

Lower lending costs expected as inflation continues to ease.

The Bank of Ghana has reduced its policy rate to 21.5% following a meeting of the Monetary Policy Committee (MPC). The decision was announced in a press statement issued on September 17, 2025, after the Committee’s one hundred and twenty-sixth meeting held between September 15 and 17, 2025.

According to the MPC, the cut in the policy rate was influenced by a consistent fall in inflation. Headline inflation declined to 11.5% in August 2025, the lowest level in four years. The Bank attributed the decline to prudent monetary policy, fiscal consolidation, appreciation of the cedi, and improved food supplies.

The Committee noted that lending rates are already reflecting the downward trend. Average lending rates dropped from 26.6% in July to 24.2% in August, which the Bank said should reduce borrowing costs and encourage private sector activity. The statement added that households may also benefit from improved access to credit.
The MPC projected that inflation will fall within its medium-term target of 8% plus or minus 2% by the end of 2025. However, it cautioned that increases in utility tariffs could temporarily add to inflationary pressures in the short term.

The press statement further indicated that fiscal discipline, effective liquidity management, and stronger reserve buffers will remain necessary to sustain disinflation. The Bank said it will closely monitor risks and respond where necessary to maintain stability.

The cut in the policy rate represents one of the most significant adjustments in recent years. The Committee said it reflects progress in reducing inflation while supporting economic activity.