The Ghana Chamber of Commerce and Industry has called for a further reduction in the Bank of Ghana’s policy rate to 20 percent by the end of 2025, insisting the move will not undermine macroeconomic stability despite concerns about inflation.
The central bank’s key lending rate currently stands at 25 percent, following a historic 300-basis point cut in July, the steepest reduction in its history.
While some analysts caution that an additional sharp cut could trigger inflationary pressures, the Chamber argues that the economy has gained enough resilience to support such a move.
Speaking to 3Business on Friday, August 22, the Chamber’s Chief Executive Officer, Mark Badu-Aboagye, said maintaining excessively high rates would stifle growth and slow the recovery process.
“From where I sit, I am not in support that they should keep the policy rate very high. We have the room for us to ease monetary policy to support the fiscal policy that we have adopted to consolidate our economy,” he noted.
He further explained that the impact of a policy rate cut on inflation takes time to materialise.
“It takes on average, 2 years for it to affect other macroeconomic variables especially inflation. So, the one we are enjoying now is the reduction in the policy rate years back. If you reduce the policy rate now to 20%, it’s effect on inflation will take about 3 quarters so I don’t think reducing the policy rate now will immediately affect inflation. It will take some time”, he added.
The Bank of Ghana maintained the rate at 28 percent in May before slashing it to 25 percent in July 2025 to ease credit conditions after inflation showed signs of moderation. Analysts, however, continue to warn that exchange rate volatility and imported inflation remain key risks.
By Esinu Adza, 3BUSINESS
