Central Bank decreases rates in September

Bank cuts more than expected again: At its meeting on 15–17 September, the Bank of Ghana (BOG) decided to lower its benchmark interest rate by 350 basis points to 21.50%. The decision marked the second consecutive reduction and was yet again anticipated by markets but underestimated in size.

Cooling inflation drives the cut: The key domestic factors driving the Central Bank's decision on interest rates included a sustained decline in headline inflation in the year-to-date, aided by a prudent monetary policy stance, fiscal consolidation, easing food supply constraints and the strong recovery of the cedi. Additionally, the BOG expects inflation to fall within the 6.0–10.0% target band by the end of Q4.

BOG grows less dovish: The Central Bank’s guidance has become less dovish as it dropped its statement that it would “likely reduce the policy rate further, should the disinflation trend continue” and instead said that it would “take the appropriate policy decision as and when necessary to reinforce the disinflation process”. Still, most of our panelists see room for a reduction of 50–300 basis points at the last meeting of 2025 on 17–19 November.

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