Editorial: BoG maintains easing cycle…

The Bank of Ghana (BoG) has signalled confidence that inflationary pressures will continue easing by lowering its monetary policy rate by 350 basis points (bps) to 21.5 percent, the lowest level since 2019.

Announced at the Monetary Policy Committee (MPC) September meeting’s conclusion, the decision has reinforced  central bank determination to sustain the disinflation process that has brought headline inflation to its lowest level in four years.

The rate cut extends an easing cycle that includes a 300bps reduction in July,  which has already reduced borrowing costs in the money market and helped banks pass on lower rates to businesses and households.

Official data show that average lending rates had dropped to 24.15 percent in August compared to 30.07 percent and 30.79 percent at beginning of the year and same time last year respectively.

Inflation expectations among consumers, businesses and banks have moderated, reinforcing the view that price stability is taking hold.

Governor Dr. Johnson Asiama said: “Given the current state of macroeconomic conditions, the committee’s view 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 percent, plus or minus 2 percent, by end of the fourth quarter.”

On growth, the economy continues to expand at a decent pace with data from the Ghana Statistical Service showing real GDP rising 6.3 percent in the second quarter of 2025 compared with 5.7 percent in the same period of 2024. Excluding oil, output grew by 7.8 percent.

Services and agriculture led the expansion with growth of 9.9 percent and 5.2 percent respectively.

External balances have strengthened considerably, underpinned by a sharp rise in gold and copper export earnings.

The trade surplus widened to US$6.2billion in the first eight months of 2025 from US$2.1billion in the same period last year. Gross international reserves stood at US$10.7billion at end-August, equivalent to 4.5 months of import cover – albeit a drop from the US$11.1billion (4.8 months cover) recorded in June.

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