• Bank of Ghana lowered its policy rate by 350 basis points to 21.5%.
• Inflation slowed to 11.5% in August, the lowest level in four years.
• The move aims to boost credit and investment as growth strengthens.

The Monetary Policy Committee of the Bank of Ghana (BoG) decided at its 126th meeting to cut the policy rate by 350 basis points to 21.5% from 25%. This decision, which follows a reduction in July, reflects the institution’s confidence in the economy’s disinflationary path.

According to the statement, headline inflation eased to 11.5% in August from 12.1% in July, the lowest in four years. Core inflation, which excludes energy and utilities, also slowed, while inflation expectations from households, businesses, and the financial sector eased significantly. These signs support the BoG’s objective of bringing inflation back “within the medium-term target of 8 ± 2 percent [between 6% and 10%] by the end of the fourth quarter.”

The decision, aimed at reviving credit and private investment, comes as Ghana’s economy shows positive signals while remaining under IMF-supervised recovery and stabilization. GDP grew by 6.3% year-on-year in Q2 2025, compared with 5.7% a year earlier, driven by services (+9.9%) and agriculture (+5.2%). Excluding oil, growth reached 7.8%, the BoG said. Meanwhile, the cedi strengthened against the dollar, supported by strong export revenues and reserve accumulation, now covering 4.5 months of imports compared with four months at the end of 2024.

The central bank, however, warned that risks remain, including possible upward adjustments in utility tariffs. Sustaining adequate reserves, fiscal discipline, and prudent liquidity management are seen as key to consolidating disinflation gains.