Ghana Signals Rate Cut as Inflation Falls to 13.7%

AFRICAN BUSINESS AND ECONOMYJuly 20, 2025 at 2:10 PM UTC

TLDR

The Bank of Ghana may cut its benchmark interest rate—currently at 28%—by up to 300 basis points following a sharp drop in inflation and falling bond yields
The Monetary Policy Committee held an emergency meeting on July 18, earlier than the planned July 30 session
Economists anticipate a cut of 100 to 300 basis points to ease debt servicing costs, support credit growth, and boost economic recovery

The Bank of Ghana may cut its benchmark interest rate—currently at 28%—by up to 300 basis points following a sharp drop in inflation and falling bond yields. The Monetary Policy Committee held an emergency meeting on July 18, earlier than the planned July 30 session, as the central bank weighs a shift in its policy stance.

June inflation dropped to 13.7% from 18.4% in May, the lowest level since December 2021. The Ghanaian cedi has also appreciated significantly, ranking as the world’s second-best performing currency against the U.S. dollar this year after the Russian ruble.

Economists anticipate a cut of 100 to 300 basis points to ease debt servicing costs, support credit growth, and boost economic recovery. Yields on 56-day Treasury bills fell 10 points to 18% after the inflation data was published, signaling softer inflation expectations.

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Key Takeaways

A rate cut could mark a key shift in Ghana’s post-crisis recovery. The central bank’s tight stance helped stabilize inflation and the exchange rate after years of macroeconomic stress. However, rapid easing may carry risks. Some analysts suggest a gradual approach—starting with a 100 basis-point cut—to test market reactions before further action in September or November. The BoG must manage this transition carefully to sustain investor confidence, especially under the ongoing IMF-supported program. With inflation easing and debt costs still high, Ghana faces pressure to reduce rates, but must also send clear signals to both domestic businesses and international bondholders watching the pace of reforms.

Ghana

Bank of Ghana

Economy

Interest Rate

Monetary Policy

Inflation

Consumer Prices