The Monetary Policy Committee (MPC) of the Bank of Ghana has unanimously decided to maintain the policy rate at 28.0 percent, citing the need to reinforce the disinflation process.
According to the MPC, despite recent positive developments, the current level of inflation remains high relative to the medium-term target.
The Committee observed that the current level of inflation remains high relative to the medium-term target and will require maintaining the tight stance to reinforce the disinflation process," the Bank stated.
The Bank explains that this decision is based on recent economic data, which shows that headline inflation has declined consecutively in the first four months of the year, driven by both food and non-food inflation.
The Bank's core inflation measure, which excludes energy and utility prices, also points to easing inflationary pressures. Headline inflation declined by 2.6 percentage points to 21.2 percent in April 2025. A confluence of factors, including tight monetary policy stance, stepped-up liquidity sterilization efforts, downward revisions in ex-pump petroleum prices, and exchange rate stability, have supported the gradual decline in inflation.
The Ghanaian cedi has also shown significant strength, appreciating against all major currencies - 24.1 percent against the US dollar, 16.2 percent against the British pound, and 14.1 percent against the euro. The Bank's forecast suggests that inflation is expected to ease faster towards the medium-term target in the first quarter of 2026, barring unanticipated shocks.
In addition to maintaining the policy rate, the Committee has also decided to amend the Dynamic Cash Reserve Ratio (CRR) for banks, effective June 5, 2025. The new CRR policy requires banks to maintain foreign currency reserves for foreign currency deposits and domestic currency reserves for domestic currency deposits.
The Bank of Ghana's decision reflects its commitment to maintaining macroeconomic stability and controlling inflation, while supporting economic growth. With this decision, the Bank aims to ensure that inflationary pressures continue to ease, while maintaining a stable economic environment.
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