The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has reduced the policy rate from 28 per cent to 25.
This was announced by Chairman of the MPC, Governor Dr Johnson Asiama, during the 125th MPC press conference in Accra on Wednesday, July 30.
The cedi has further strengthened against the major trading currencies
Dr Asiama stated that the committee noted that macroeconomic conditions have significantly improved. Confidence in the economy is returning.
“The MPC, by a majority decision, voted to lower the policy rate by 300 basis points 25 per cent,” he said.
He said this is the biggest cut in the history of the Bank of Ghana.
Dr Asima stated that the external sector has improved markedly, with a record current account surplus of US$3.4 billion in the first half of 2025, supported mainly by higher prices and increased production volumes of gold and cocoa.
The current account surplus, together with the outturns in the capital and financial accounts, culminated in an overall balance of payment surplus of US$2.2 billion, significantly higher than the US$588.5 million recorded in June 2024. On this score, Gross International Reserves stood at US$11.1
billion at end-June 2025, equivalent to 4.8 months of import of goods and services, compared to US$8.9 billion (4.0 months of import cover) as at end-December 2024.
The external sector outlook is positive, anchored on favourable commodity prices and improved remittance inflows, despite the resumption of external debt service. On the back of the strong external sector performance and increased reserve accumulation, the cedi has further strengthened against the major trading currencies.
In the year to 25th July, 2025, the cedi appreciated by 40.7 percent against the US dollar, 31.2 percent against the British pound, and 24.2 percent against the euro. Overall, the Committee noted that macroeconomic conditions have significantly improved, inflation expectations are broadly anchored, external buffers have strengthened, and confidence in the economy is returning.
The July forecast also shows that headline inflation is expected to decline further in the third quarter of 2025 and trend within the medium-term target of 8±2 percent by the end of 2025, earlier than initial projections. However, there are upside risks to the inflation outlook, which include potential supply chain challenges emanating from the global trade tensions, and upward adjustment in utility tariffs. This notwithstanding, the impact of these risks on inflation are expected to be offset by appropriately tight monetary policy stance and continued fiscal consolidation.
“Given these considerations, the Committee, by a majority decision, voted to lower the Monetary Policy Rate by 300 basis points to 25.0 percent. Looking ahead, the Committee will continue to assess incoming data and likely reduce the policy rate further, should the disinflation trend continue. The Committee remains committed to the price stability mandate, while creating conditions for inclusive and sustainable
growth,” he said.
