The Bank of Ghana has executed a significant shift in monetary policy, cutting its benchmark interest rate by 250 basis points to 15.50 per cent, as the country’s economic recovery gains momentum and inflation falls dramatically from crisis levels.
The decision, announced by the Monetary Policy Committee (MPC) on January 28, 2026, marks a move from stabilisation towards fostering stronger growth and job creation.
The committee cited a remarkable transformation in the macroeconomic landscape over the past year as the rationale for its move. “Headline inflation declined sharply from 23.8 per cent in December 2024 to 5.4 per cent in December 2025,” the MPC stated in its press release. This disinflation was described as “broad-based” and underpinned by “tight monetary policy, fiscal consolidation, and currency appreciation.”
Concurrently, economic growth has strengthened. The release noted that “overall Real GDP expanded at an annual rate of 6.1 per cent” in the first three quarters of 2025, driven by services and agriculture. Business and consumer confidence has also improved, with respondents citing “easing inflation conditions, stable currency, [and] prospects for lower borrowing costs.”
The MPC highlighted that this newfound stability is supported by a vastly improved external position. Gross International Reserves climbed to US$13.8 billion, providing “5.7 months of import cover” and underpinning the cedi, which “recorded an appreciation of 40.7 per cent against the US dollar” in 2025. Fiscal health has also been restored, with public debt falling “to 45.5 percent of GDP at end-November 2025, down from 63.1 per cent a year earlier.”
With this foundation in place, the central bank’s focus is now evolving. “With stability largely achieved, the focus of policy is gradually shifting toward consolidating these gains and supporting stronger real sector recovery, job creation, and improved financial intermediation,” the committee explained.
While acknowledging potential risks from “upward adjustments in utility prices and commodity market volatility,” the committee judged that “current monetary conditions remain tight relative to prevailing inflation dynamics.” This assessment paved the way for the aggressive 250 basis point reduction.
The move is expected to further lower borrowing costs across the economy, building on a trend that has already seen the “average lending rates” drop to 20.45 per cent from 30.25 per cent over the course of 2025.
The MPC concluded that sustaining Ghana’s economic progress “will hinge on disciplined fiscal policy, strong policy coordination, and targeted agricultural interventions.”
Source:
www.graphic.com.gh