The Bank of Ghana (BoG) has announced a 200-basis-point reduction in its Monetary Policy Rate, bringing it down to 27%.
This marks the second rate cut since 2021, aimed at alleviating pressure on borrowers and reflecting reduced inflationary trends.
Previously held at 29% for nine months following a reduction from 30% in January 2024, the rate cut is expected to provide temporary relief for borrowers over the next two months.
Speaking at the 120th Monetary Policy Committee press briefing on Friday, September 27, BoG Governor, Dr. Ernest Addison, explained that the policy adjustment is in response to easing inflation and improving economic conditions.
Preliminary data from the Committee’s July 2024 meeting indicated that macroeconomic conditions had generally improved, with headline inflation and core inflation both declining significantly in recent months.
The BoG also projects that inflation will continue to decline towards the year-end target of 13-17%, with further reductions expected to reach the medium-term target of 6-10% by the end of 2025, barring any unforeseen shocks.
Given the current balance of risks to inflation, the Committee opted for a rate cut to support continued economic recovery.
