FX.co ★ Ghana Cuts Key Policy Rate by Record Amount, 350 bps

On September 17th, the Bank of Ghana reduced its benchmark monetary policy rate by 350 basis points, bringing it down to 21.5%. This decision was influenced by continued disinflation, robust economic growth, and stronger external financial reserves. In August, headline inflation dropped to 11.5%, marking its lowest level in four years. Economic activity remained robust, with real GDP increasing by 6.3% in the second quarter of 2025, while non-oil GDP saw a rise of 7.8%, driven by significant advancements in the agriculture and services sectors. The external sector also demonstrated resilience, achieving a provisional trade surplus of $6.2 billion and gross international reserves totaling $10.7 billion by the end of August, which are sufficient to cover 4.5 months of imports. The cedi appreciated by 21% against the US dollar since the start of the year, positioning it as one of the world's strongest currencies. The central bank acknowledged that, despite the risks linked to utility tariff adjustments, overall inflation expectations remained stable, external financial reserves have improved, and domestic confidence is on the rise. The bank reasserted its commitment to supporting economic recovery without compromising these recent advancements.