In its March 2025 policy meeting, the Bank of Ghana cut its benchmark interest rate by 150 basis points to 14%, marking a fifth consecutive reduction and a return to looser borrowing conditions last seen before Russia’s invasion of Ukraine triggered a global inflation shock. The move was slightly more aggressive than the market consensus, which had anticipated a 100-basis-point cut, and underscores policymakers’ heightened focus on supporting growth despite lingering upside risks to inflation.
Headline inflation recently eased to 3.3% in February, its lowest level in 25 years. However, base effects and a sharp rise in global energy prices, driven by the conflict in the Persian Gulf, are expected to put renewed upward pressure on prices. At the same time, last year’s surge in gold prices boosted foreign exchange inflows into Ghana, easing the strain on the central bank to defend the cedi and providing additional room to lower policy rates.
