Ghana’s central bank may implement another interest rate cut as inflation continues to fall faster than expected, creating unusually high real borrowing costs that could hinder the country’s economic rebound, according to the Bank of Ghana Governor, Johnson Asiama.
At the Monetary Policy Committee (MPC) meeting held on Monday, Asiama noted that while Ghana’s economy is showing its strongest fundamentals in years, the sharp rise in real interest rates remains a significant policy challenge.
The central bank’s MPC had previously reduced its benchmark interest rate by a record 350 basis points to 21.5% during its September meeting, citing a sustained decline in inflation. This marked the second consecutive rate cut by the Bank of Ghana as inflation eased from crisis levels. The next policy rate decision is scheduled for Wednesday.
Asiama projected that consumer inflation is likely to fall to between 4% and 6% by the end of 2025, before stabilising around the target band of 8% ± 2 percentage points in 2026. This trend, he said, indicates that Ghana may be entering a multi-year phase of price stability.
“As inflation declines faster than projected, real interest rates have risen sharply. Staff analysis shows scope for gradual easing, but the balance must preserve credibility and avoid undermining the disinflation gains,” Asiama said.
The governor further noted that Ghana’s economy is transitioning “from recovery to expansion” following what he described as the country’s worst economic crisis in a generation.
Recent data show that Ghana’s economy expanded by 6.3% in the first half of 2025, while international reserves stood at $11.41 billion, the highest level in several years. Additionally, the cedi has remained broadly stable, reflecting improved investor confidence and stronger macroeconomic management.
