Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has hailed the Bank of Ghana’s decision to cut the policy rate to 18%, the lowest since March 2022, as a “major milestone” in the country’s economic recovery.
The Monetary Policy Committee (MPC) of the Bank of Ghana reduced the policy rate by 350 basis points, citing growing stability in the economy and declining inflation levels, which currently stand at 8% as of October, down from 27% in November 2024.
Dr. Forson believes this move will boost lending, ease credit pressures on businesses and households, and stimulate economic growth.
“This marks a drastic fall from the 27 percent recorded in November 2024. The move reflects renewed economic confidence, and it means lower borrowing costs, improved access to credit, and greater room for businesses and individuals to grow, invest, and create jobs.”
“The recovery is clearly strengthening, and it can only get better!” he remarked.
The Bank of Ghana’s Governor, Dr. Johnson Asiama, announced that the committee is optimistic about maintaining price stability and keeping inflation within the target band.
“The bank will continue to monitor developments and take necessary policy decisions to ensure sound macroeconomic conditions.”
The central bank projects a continued stable inflation profile around the target and well into the first half of next year, 2026. This is against the backdrop that current risks in the outlook to shift the path of inflation away from target have moderated significantly.
Dr. Asiama added that the prevailing high real interest rate provides some room to ease policy to further boost the current growth recovery efforts.
“Given these considerations, the committee, by majority decision, voted to lower the monetary policy rate further by 350 basis points to 18.0%”, he announced.
“We have one additional measure. In addition to the policy rate reduction, the bank will now return to the use of the 14 day bill as its main instrument for conducting open market operations”.
Consequently, average lending rates have also fallen sharply to 22.22% in October 2025, from 30.07% in January 2025, making credit more accessible to businesses and individuals, according to the Bank of Ghana’s November 2025 Summary of Economic and Financial Data.
From 30.07% in January 2025, the average lending rates increased to 30.12% in February 2025, but fell to 29.18% in March 2025.
It further decreased to 27.40% in April 2025 and then to 26.90% in May 2025. However, it rose marginally to 27.00% in June 2025, but has since taken a dive.
Additionally, the Ghana Reference Rate has also fallen sharply to 17.86% in October 2025, from 29.72% in January 2025.
Meanwhile, the average lending rates vary among the banks and the respective sectors they lend to. Some banks offer loans equivalent to the Ghana Reference Rate, whilst others will charge rates as high as 39%.
This, however, depends on the risk profile of the customers.
By Adnan Adams Mohammed
