Bank of Ghana Holds Policy Rate at 28% to Sustain Inflation Control Efforts
The Bank of Ghana has decided to keep its policy rate unchanged at 28%, as part of ongoing efforts to contain inflationary pressures. This decision was announced by Governor Dr. Johnson Asiama during a media briefing following a meeting of the Bank’s Monetary Policy Committee (MPC).
Dr. Asiama explained that the central bank’s latest assessments indicate a steady decline in inflation, supported by a tight monetary policy, stable exchange rates, and continued fiscal consolidation. Headline inflation dropped by 2.6 percentage points from the beginning of the year, reaching 21.2% in April 2025. This improvement is attributed to easing in both food and non-food inflation.
He noted that a combination of factors—including consistent monetary tightening, increased liquidity absorption, falling petroleum prices at the pump, and exchange rate stability—has contributed to the easing inflation trend.
Looking ahead, inflation is now expected to reach the Bank’s medium-term target more quickly, potentially by the first quarter of 2026 instead of the previously projected second quarter, assuming no unexpected shocks. The Bank aims to bring inflation down to 12% by the end of 2025.
“Despite the encouraging progress, inflation levels remain above our target, and maintaining a tight policy stance is necessary to sustain the disinflation momentum,” Dr. Asiama stated.
Given these conditions, the MPC unanimously agreed to maintain the policy rate at 28%.
Turning to currency performance, the Governor highlighted a strong recovery of the Ghanaian cedi against major international currencies. From January to May 21, 2025, the cedi appreciated by 24.1% against the US dollar, 16.2% against the British pound, and 14.1% against the euro. He attributed this rebound to tight monetary policies, improved fiscal discipline, robust foreign exchange reserves, strict forex market regulations, and positive market sentiment.
Dr. Asiama assured that the Bank of Ghana remains committed to ensuring the continued stability of the cedi.
The country’s external sector has also shown notable improvements, with a provisional current account surplus of $2.1 billion in the first quarter of 2025. This was driven by higher commodity prices, increased output of gold and cocoa, and strong remittance inflows. Consequently, Ghana recorded an overall balance of payments surplus of $1.1 billion during the same period.
These developments have led to a significant build-up in reserves, with Gross International Reserves standing at $10.7 billion in April 2025—enough to cover 4.7 months of imports.
In summary, the Bank of Ghana’s decision to hold the policy rate at 28% underscores its commitment to driving inflation down while maintaining currency and macroeconomic stability.
