Ghana’s Central Bank Slashes Record 350bps as Inflation Eases, Economy Shows Strong Growth

Ghana’s central bank stunned markets on Wednesday by delivering its largest-ever policy rate cut, reducing the main lending rate by 350 basis points to 21.5%. The move exceeded analyst expectations, signaling confidence in the country’s improving macroeconomic conditions. The decision comes amid continued easing of inflation and strengthening economic growth prospects.

Analysts had anticipated a smaller reduction. A recent Reuters poll of eight economists predicted a 200 basis point cut to 23%, following a 300 basis point reduction in July. The central bank’s surprise move underscores its commitment to supporting growth while keeping inflation under control.

Governor Johnson Asiama said Ghana’s economy has gained strong momentum in recent months. Gross Domestic Product (GDP) expanded by 6.3% year-on-year in the second quarter of 2025, up from a revised 5.7% during the same period last year. The growth was largely fueled by gains in the services sector, which has shown resilience amid global economic uncertainties.

Inflation continues its downward trajectory, with headline inflation dropping to 11.5% in August — the lowest level since October 2021. This marks the eighth consecutive month of falling prices, reflecting stabilizing consumer costs and easing pressure on households and businesses across the country.

Looking ahead, Asiama expressed optimism about inflation prospects, projecting that headline inflation would align with the medium-term target of 8% ±2 percentage points by the end of the fourth quarter. The central bank’s decisive action highlights Ghana’s ongoing economic recovery and provides fresh momentum for both domestic and foreign investors.

source: business day