BoG lowers benchmark rate to 14% as inflation pressures ease

The Bank of Ghana has reduced its policy rate by 150 basis points to 14 percent, citing easing inflation and improving economic conditions.

Announcing the decision after its 129th Monetary Policy Committee meeting, the Bank said, “the Committee decided to reduce the monetary policy rate by 150 basis point to 14.0 percent.”

The central bank’s move follows a sharp decline in inflation, with headline inflation falling to 3.3 percent in February 2026 from 5.4 percent in December 2025. According to the Committee, “the strong disinflation during the past 14 months has been supported by the relatively tight monetary policy stance, cedi appreciation, and improved food supply conditions.”

The Bank also noted that underlying price pressures have eased significantly. “Core inflation, which excludes energy and utility items, also declined, indicating muted underlying price pressures,”the statement said.

Economic activity remains robust, reinforcing the case for policy easing. Provisional data shows Ghana’s economy grew by 6.0 percent in 2025, up from 5.8 percent in 2024, with non-oil growth reaching 7.6 percent. The Bank added that, “the real Composite Index of Economic Activity recorded an annual growth of 8.4 percent in January 2026.”

Falling interest rates have also supported private sector activity. The report indicated that, “average bank lending rates declined to 19.2 percent in February 2026, from 30.1 percent same month last year.”

Despite the positive outlook, the Committee warned of risks from global developments, particularly tensions in the Middle East. “The conflict has disrupted global supply chains, increased crude oil market volatility, raised financial stability concerns, and heightened global uncertainty,” the Bank said.

Still, the Committee maintained that current conditions support a cautious easing stance. “The favourable domestic macroeconomic conditions and high prevailing real interest rates provide scope to ease the policy rate further,” it added.

The Bank stressed its readiness to act if risks materialise, noting, “the Committee stands ready to take appropriate policy actions as needed to safeguard price stability.”

The bank of Ghana also announced that the next Monetary Policy Committee meeting is scheduled for May 18 to 20, 2026.