The Bank of Ghana (BoG) has reduced its Monetary Policy Rate by 200 basis points, lowering it to 27%.
This is the second cut since 2021, aimed at reducing inflation and providing relief to borrowers.
Following a nine-month hold at 29%, which was previously reduced from 30% in January, the latest cut is expected to offer temporary relief to borrowers in the coming months.
During the 120th Monetary Policy Committee briefing on Friday, September 27, BoG Governor Dr. Ernest Addison explained that the decision reflects recent inflationary declines and positive economic developments.
“In the assessment of the Committee, preliminary data since the last MPC meeting held in July 2024 indicates that macroeconomic conditions have generally improved. Headline inflation has eased, and growth has picked up.
“Fiscal policy implementation has been robust, providing impulse that is supportive of growth, while monetary conditions have remained tight and supportive of the disinflation process.”
“Headline inflation, since the first quarter, has declined for five consecutive months by 5.4 percentage points. Core inflation has also declined sharply over the same comparative period by 6.9 percentage points. These trends suggest that the disinflation process is on course.”
“The latest forecasts show that inflation will continue to ease towards the range target of 13-17 per cent for the year and steadily track back towards the medium-term target of 6-10 per cent by the end of 2025, barring unanticipated shocks. At the current juncture, the committee judged the risks to the inflation outlook as fairly balanced.”
“Given these considerations, the Committee decided to lower the Monetary Policy Rate by 200 basis points to 27.0 per cent.”