Ghana Central Bank Makes Historic Interest Rate Cut as Inflation Drops to 3-Year Low
Story: written by Okafor Joseph September 18,2025
The Bank of Ghana has delivered its largest-ever interest rate cut, slashing the benchmark policy rate by 350 basis points to 21.5% in a surprise move on Wednesday. The aggressive cut comes as inflation continues to ease and the West African nation’s economic outlook strengthens.
The reduction was far steeper than analysts expected. A Reuters survey of eight economists had forecast a 200-basis-point cut to 23%, following the 300-point reduction in July by the Monetary Policy Committee (MPC).
Governor Johnson Asiama said Ghana’s economy has shown “robust growth momentum” in recent months. Data from the second quarter of 2025 revealed a 6.3% year-on-year GDP expansion, up from a revised 5.7% a year earlier, largely driven by the services sector.
Meanwhile, headline inflation dropped for the eighth consecutive month, reaching 11.5% in August 2025, its lowest level since October 2021.
“Given the current macroeconomic environment, the committee expects inflation to keep falling in the near term,” Asiama told reporters. He added that inflation is projected to enter the medium-term target range of 8% ±2% by the end of the fourth quarter.
The record rate cut underscores the central bank’s confidence that Ghana is on track to restore price stability while boosting growth, with expectations that borrowing costs for businesses and consumers will ease in the months ahead.
