Central Bank slashes rates in November

Bank delivers its third hefty interest rate cut in a row: At its meeting on 24–26 November, the Bank of Ghana (BOG) lowered its policy rate by 350 basis points to 18.00%. This marked the third consecutive rate cut in 2025 and brought the cumulative reduction since the start of the year to 1,000 basis points. The cut was again larger than markets had anticipated.

Improved inflation outlook guides another rate cut: The key factors driving the Central Bank's decision included a faster-than-anticipated, broad-based decline in headline inflation from 23.5% in January to 8.0%—the mid-point of the target range—in October. The decision was also supported by a favorable inflation outlook, improving consumer and business sentiment, a strong external sector performance helping stabilize the currency, and moderate imported inflation. The Bank added that, despite the aggressive interest rate reductions made this year, real interest rates remain high. Regarding activity, the Bank noted that GDP growth remained strong in H1 2025, and that in August, economic activity grew again, driven by the service and agricultural sectors.

Further monetary easing remains on the table for 2026: The BOG did not provide explicit forward guidance; however, several Monetary Policy Committee members indicated that they are inclined to support a further reduction in the monetary policy rate, provided inflation continues to ease. In line with this, our Consensus is for around 450 basis points of cuts in 2026. The next monetary policy meeting is set to be held on 26–28 January.

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