Ghana’s central bank on Wednesday announced a further 250-basis-point lowering in its benchmark lending rate to 15.5 percent to boost growth after inflation has been broadly tamed.
Addressing the media during a regular Monetary Policy Committee (MPC) press conference, Bank of Ghana Governor Johnson Asiama said that, despite the reduction, monetary policy conditions remain tight, considering the prevailing inflation dynamics.
According to Asiama, inflation has declined faster than anticipated, with expectations well anchored amid significantly improved macroeconomic conditions, supported by a tight monetary policy stance, fiscal consolidation, and significant build-up of reserves.
The central bank, according to the governor, expects headline inflation to remain broadly within the medium-term target of 6.0 percent and 8.0 percent, “barring potential spillover risks from upward adjustments in utility prices and commodity market volatility.”
“With stability largely achieved, the focus of policy is gradually shifting toward consolidating these gains and supporting stronger real sector recovery, job creation, and improved financial intermediation,” he added.
Asiama allayed the fears that the shift toward growth and the strong growth expectations for 2026 may introduce some demand-side pressures.
“The MPC judged that current monetary conditions remain tight relative to prevailing inflation dynamics. Sustaining Ghana’s macroeconomic gains will hinge on disciplined fiscal policy, strong policy coordination, and targeted agricultural interventions to contain food inflation, while remaining vigilant to heightened geopolitical tensions,” he assured.
The International Monetary Fund in December released an additional 385 million U.S. dollars to the West African country after favorable reviews of the implementation of the reform program.