BoG Projected to Further Ease Policy Rate by 2.5-3% as Inflation Returns to Target Band
The Bank of Ghana (BoG) is expected to further reduce its Monetary Policy Rate (MPR) by between 250 basis points (bps) and 300bps at its next Monetary Policy Committee (MPC) meeting scheduled for November 2025.
This projection comes from leading financial research firm, IC Research, following a sharper-than-expected decline in headline inflation in October 2025.
According to IC Research, Ghana’s annual headline inflation has fallen back within the BoG’s medium-term target band for the first time since August 2021. The September 2025 Consumer Price Index (CPI) recorded a year-on-year inflation rate of 9.4%, down 210bps from 11.5% in August 2025, and below the firm’s forecasted 190bps decline.
The disinflation trend, IC Research noted, was broad-based with goods inflation, which constitutes 72.5% of the overall CPI basket, easing by 270bps to 11.2%, while services inflation moderated by 60bps to 4.8% year-on-year.
“In our view, this reflects recent foreign exchange shifts to the upside and resultant upticks in domestic energy prices,” IC Research stated. “We view the first single-digit headline inflation in September 2025 as confirmation that the Ghanaian economy has progressed decisively towards price stability after over four years of double-digit price increases.”
The firm, however, cautioned that some upside risks to the inflation outlook remain, but emphasised that the authorities are likely to prioritise consolidating the recent gains in price stability.
“The durable moderation in inflation risk has further strengthened the case for another cut in the nominal policy rate, with downside scope for domestic bond yields in the fourth quarter of 2025,” it added.
The BoG, in its last MPC meeting, reduced its policy rate by 350bps to 21.5% from 25% in September 2025, citing the sustained decline in inflation.
Announcing the new policy rate, Dr Asiama stated, “Given the current state of macroeconomic conditions, the view of the Committee was that inflation will continue to ease in the near term. In the outlook, headline inflation is expected to drop to within the medium-term target of 8 ± 2 percent by the end of the fourth quarter. However, the possible upward review of utility tariffs could exert some price pressures in the medium term. Notwithstanding this, maintenance of an appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal consolidation, and adequate reserve buffers should sustain the disinflation process.”
“Given these considerations, the Committee, by a majority decision, voted to lower the Monetary Policy Rate by 350 basis points to 21.5 percent. The Committee will continue to monitor macroeconomic developments and take the appropriate policy decision as and when necessary to reinforce the disinflation process,” he added.
Meanwhile, Ghana has been ranked the third country in Sub-Saharan Africa with the highest policy rate, according to the World Bank’s October 2025 Africa Pulse report. This is despite recent monetary easing by the Bank of Ghana (BoG).
The ranking comes even after a cumulative 7.5 percentage point cut in Ghana’s benchmark rate since January 2025. The BoG has attributed the reductions to a sharp decline in inflation, which has now eased into the single-digit range for the first time in over three years.
