The Bank of Ghana (BoG) has slashed its monetary policy rate from 21.5% to 18%. The reduction represents one of the most significant interest rate cuts seen in recent years.

BoG Governor Dr. Johnson Asiama made the disclosure at a press briefing held at the Bank of Ghana headquarters in Accra on November 26. He noted that factors such as inflation, a stabilising currency and improved macroeconomic conditions contributed to the sharp fall.

Fitch Solutions projects that the Bank of Ghana will lower its monetary policy rate to 16.50% by the end of 2026, driven by sustained currency stability and a continued drop in inflation.

At the 2026 PricewaterhouseCoopers (PwC) Post-Budget Forum in Accra, Mike Kruiniger, an Assistant Director at Fitch Solutions, explained that Ghana’s improving macroeconomic outlook creates room for further monetary easing in the year ahead.

“Rates have remained elevated, but the Bank of Ghana launched a decisive easing cycle this summer, cutting by 650 basis points so far — the fastest monetary easing cycle globally this year,” he said.

According to him, inflation’s return to the central bank’s target range, combined with firm foreign exchange inflows and a stable currency, provides the basis for Fitch’s projection that the policy rate will ease to 16.50 percent by the end of 2026.

Ghana’s relatively stable cedi, easing inflation and robust agricultural performance have earned the country an upgrade in growth by UK-based financial analytics firm Fitch Solutions.

Fitch, in its September 2025 Monthly Outlook report, lifted its economic growth forecast for the country from 4.2% to 4.9%, citing signs of renewed macroeconomic stability driven by easing inflation, a relatively stable cedi and resilient agricultural performance.

Highlighting the challenges the economy is still grappling with, such as tight fiscal consolidation, elevated interest rates and stagnant oil output, the report said Ghana’s economy remains firmly on a recovery path.

The upgrade follows strong performance in Ghana’s agricultural sector, which boosted the economy’s growth in the first quarter of the year. Between January and March, Ghana’s Gross Domestic Product (GDP) grew by 5.3%, compared to 4.7% recorded during the same period last year.

Fitch believes this growth will continue into 2026, predicting that the economy will expand by around 5.0%. This improvement is expected to come from lower inflation (prices rising more slowly), possible interest rate cuts and more government spending as Ghana’s IMF-supported program comes to an end.

However, new data from the Ghana Statistical Service (GSS) shows that growth slowed slightly in July 2025 to 4.5%, compared to 8.3% at the same time last year. Even so, agriculture remained the strongest part of the economy, growing by 8.0%—much higher than the 2.4% recorded in July 2024.Inflation for September 2025 dropped to 9.4% from 11.5% in August, according to the GSS. This marks the ninth consecutive month of decline since October 2021. GSS attributed the development to a slowdown in food price increases. As of June, the country recorded a 13.7% rate — a 4.7 percentage point decline from the 18.4% reported in May.Food inflation fell by 6.5 percentage points to 16.3%, down from 22.8% in May, while non-food inflation dropped by 3 percentage points to 11.4%.The Upper West Region recorded the highest regional inflation of 32.3%, largely driven by food inflation and utilities. The Bono Region recorded the lowest at 8.4%.On a regional level, the Upper West once again recorded the highest inflation at 24.8%, though down from 32.3% in June — more than twice the national average of 12.1%. In contrast, the Central Region posted the lowest rate at 7.7%.Before the release of the recent data, economic research firm IC Research projected that Ghana’s inflation rate would experience a significant decline, dropping to 16% by the end of June. IC Research noted that the projected improvement was partly driven by the appreciation of the local currency and a reduction in fuel prices, both of which were easing inflationary pressures.“The June 2025 Consumer Price Index (CPI) data window recorded a 29.5% month-on-month and 35.3% year-on-year appreciation of the Ghanaian cedi against the US dollar. This exerted downward pressure on prices of imported items, with notable declines in petroleum prices and transport fares. The announced 15.0% reduction in commercial transport fares will continue to restrain transport inflation, with downward spillovers for other items.“Additionally, we estimate that the lower transport cost likely eased the month-on-month pressure observed for vegetables and tubers last month, potentially sustaining food disinflation in June 2025. Consequently, we forecast a 240-basis-point decline in the June 2025 annual inflation to 16.0%, with the month-on-month rate at 0.8%,” IC Research added.