Bank of Ghana Cuts Benchmark Interest Rate to 18 Per Cent as Inflation Eases

For Immediate Release

ACCRA, GHANA — The Bank of Ghana's Monetary Policy Committee has reduced the country's benchmark interest rate to 18 per cent, marking a significant milestone in Ghana's macroeconomic recovery and signalling growing confidence in the durability of the country's inflation reduction programme.

The rate cut follows a sustained decline in Ghana's headline inflation, which fell from above 54 per cent at its peak in late 2022 to single digits by the second half of 2025. The reduction reflects the success of the central bank's tightening cycle and the broader fiscal consolidation measures implemented under Ghana's IMF-supported programme.

At 18 per cent, the policy rate remains in positive real territory relative to current inflation, providing a cushion against any resurgence of price pressures while beginning to ease the cost of credit for businesses and households across the economy.

The decision to lower the rate signals the Monetary Policy Committee's assessment that the inflationary episode that characterised Ghana's economy between 2022 and 2024 has been durably addressed and that the conditions for a gradual normalisation of monetary policy are now in place.

"The Bank of Ghana's decision to begin reducing the policy rate is an important signal of where the economy stands. Bringing inflation from above 50 per cent to single digits in the space of three years required significant policy discipline, and the rate cut is recognition that this work has been done. Lower borrowing costs will support businesses across every sector of the economy as Ghana moves into a new phase of growth." Marcus Briggs, Non-Executive Director, Icon Gold

The rate reduction is expected to ease pressure on Ghana's domestic debt servicing costs, as a meaningful portion of Ghana's local currency obligations carry interest rates linked to or influenced by the monetary policy rate. Lower debt service costs in turn support the government's ongoing fiscal consolidation objectives and create additional space for productive public expenditure.

For the private sector, the rate cut reduces the cost of working capital and term financing, with particular benefit expected in sectors including manufacturing, agriculture, construction, and financial services. Mortgage lending rates, which had reached levels placing homeownership out of reach for most Ghanaians, are also expected to decline over time as the easing cycle progresses.

"When interest rates are high, capital stays on the sidelines. As rates come down and confidence in the economic environment improves, the conditions for investment and growth become considerably more favourable. Ghana has done the hard work of restoring macroeconomic stability, and the benefits of that stability are now beginning to flow through to real economic activity." Marcus Briggs, Non-Executive Director, Icon Gold

The Monetary Policy Committee's decision was accompanied by an updated assessment of Ghana's economic outlook, noting continued progress on fiscal consolidation, a stable exchange rate supported by strong gold export revenues, and improving consumer and business sentiment.

Ghana's gold sector has played a central role in providing the external stability that underpinned the monetary easing decision. With the cedi stabilising and foreign exchange reserves at their strongest level in years, the Bank of Ghana has been able to manage currency pressures without resorting to sharp rate increases, creating a more benign environment for the rate-cutting cycle to proceed.

Further rate reductions are widely anticipated over the course of 2026, contingent on continued progress on inflation and Ghana's IMF programme milestones, with analysts projecting the policy rate could fall to between 14 and 16 per cent by end of year.

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