The financial markets in Ghana are awaiting the outcome from unplanned meeting to be held by the Monetary Policy Committee of the Bank of Ghana, called on Thursday, July 17, 2025.
The Bank of Ghana has held this unscheduled meeting due to inflation having dropped considerably and a shift in economic conditions. The action taken by the Bank of Ghana demonstrates their commitment to flexible monetary policy when business and investors are looking for direction on cost of borrowing in the second largest economy in West Africa.
Context: Why the Emergency Meeting?
The Bank of Ghana (BoG) said the emergency meeting was convened to “consider developments in the economy over the last two months,” which has included ongoing disinflation and continued pressure from industry for interest rate declines. Following Ghana’s steady and continued decline in headline inflation to 13.7%, in June 2025 – the lowest inflation rate since 2021, down from much higher levels. The improvement in inflation is attributed to improved currency strength, fiscal discipline, and strong export receipts, namely gold, cocoa and oil.
The scheduled MPC was for July 28, with a decision made on July 30. The emergency meeting was moved forward in part because of a conflict on the government’s mid-year fiscal policy review that would be on July 24.
Market Expectations: Rate cut or hold?
The MPC last held Ghana’s benchmark policy rate at 28% in May and adopted a wait-and-see approach on the basis that inflation had only mildly easing. With best inflationary forecasts now, and reasonably stable macroeconomic conditions, many influential economic agents—such as business executives, government officials, and international institutions now advocate for a rate cut in order to boost credit expansion and strength the recovery.
However, opinions differ. The International Monetary Fund (IMF) is still advocating for monetary policy tightening process, to ensure inflation reduces to targets as low as 8% by year end, and global ratings agency Fitch Solutions predicts the Bank of Ghana (BoG) will instead keep the policy rate unchanged at 28% until there is more evidence of durable disinflation. Within the MPC, some members support a cut, while others maintain a cautious view due to global headwinds and the risk of easing prematurely.
Fitch expects that if disinflation continues, the BoG may be able to start easing from the September meeting, with the policy rate likely to start reducing towards a range of 24% and 25% before December 2025.
Broader Economic Implications
Ghana’s real interest rates are now amongst the highest in Africa’s frontier markets, sparking calls for a pivot to looser policy as inflation falls and the Ghanaian cedi remains unchanged bolstered by just shy of $8 billion of foreign currency reserves. With a good trajectory in producer price inflation and stable foreign currency reserves, the Bank of Ghana’s hand to act and support a healthier credit environment and growth in investments is being pushed.
When Will the Decision Be Announced?
The Bank of Ghana announced that the outcomes from the emergency MPC meeting including any policy change are to be formally announced at 12:00 on Friday 18 July 2025. The outcomes will set the stage for financial markets and borrowers in the second half of the year as the nation looks to the government’s revision of the mid-year budget.