The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) has announced a significant reduction in its policy rate, lowering it by 350 basis points from 25% to 21.5%. This pivotal decision was made following the committee's 126th meeting on September 17, 2025, and was officially communicated by the Governor of the Bank of Ghana, Dr. Johnson Asiama.

Dr. Asiama elaborated that the reduction was primarily driven by the committee's positive outlook on inflation. The MPC forecasts that headline inflation will continue to ease in the near term and is expected to fall within the medium-term target of 8% ± 2% by the close of the fourth quarter. This anticipated disinflation process heavily influenced the majority decision to decrease the policy rate.

Highlighting the robustness of the Ghanaian economy, Dr. Asiama also underscored the strength of the Cedi. He stated that the currency remains among the strongest globally year-to-date, reflecting a cumulative appreciation of 21.0% against the US dollar through September 12, 2025. This strong performance is attributed to prudent monetary policy measures, effective liquidity management, ongoing fiscal consolidation efforts, and increased foreign exchange inflows. The Bank of Ghana affirmed its commitment to keenly monitoring the Cedi's performance and implementing regulatory measures to ensure its continued stability.

Despite the optimistic macroeconomic environment, the Governor issued a cautionary note regarding potential price pressures stemming from possible upward reviews of utility tariffs. He specifically mentioned a request by the Electricity Company of Ghana (ECG) for a substantial 225% increase in its Distribution Service Charge. Such adjustments, if implemented, could exert some pressure on prices in the medium term, potentially impacting the inflation rate.

Looking ahead, the MPC reiterated its commitment to continuously monitor macroeconomic developments and stands ready to take appropriate policy decisions as and when necessary to reinforce the disinflation process. The reduction in the policy rate is widely anticipated to have a positive impact on the economy by making credit more affordable and accessible for businesses. Lower interest rates are expected to ease the cost of borrowing, facilitating corporate expansion, investment in new projects, and strengthening working capital.