Ghana’s monetary authorities have taken a decisive step in recalibrating the country’s economic levers, cutting the central bank’s benchmark interest rate to 15.50 per cent in January 2026, the lowest in four years and reflective of broad-based improvements in macroeconomic stability. This move, enacted by the Bank of Ghana’s Monetary Policy Committee (MPC), represents a 250 basis-point reduction in a single meeting and brings the cumulative easing since mid-2025 to 12.5 percentage points.
At its core, this decision signals a transition from inflation combat towards supporting sustainable growth, underpinned by the significant deceleration in price rises and bolstered by strengthened fiscal and external positions.
READ ALSO: How Will Ghana’s Longest Bridge Impact Trade
Arguably, the most compelling driver of this rate cut has been the remarkable fall in Ghana’s inflation rate. Having peaked at 54.1 per cent in December 2022, inflation has fallen sharply over the past three years, reaching levels within or near the Bank’s medium-term target band, centred on 8 per cent with a tolerance of ±2 per cent, with official figures citing 5.4 per cent in December 2025.
This dramatic reversal reflects a mixture of domestic policy discipline, a stronger currency supported by rising export receipts, notably from gold and cocoa, and stabilising global commodity prices. The trajectory from a hyperinflationary phase to controlled price dynamics has afforded the central bank the policy space to ease without risking a resurgence of inflationary pressure.
Ghana’s policy rate reduction comes against a backdrop where many emerging economies maintain relatively high borrowing costs. Even as the current rate of 15.50 per cent is significantly lower than it was a year ago, it remains elevated in comparison with global averages and reflects the structural realities of Ghana’s economy, including legacy inflation expectations and financial system risk premia.
Comparative data from 2025 show that Ghana’s benchmark interest rate was among the highest in sub-Saharan Africa even after successive cuts, underscoring the cautious nature of the central bank’s approach. Previous cuts earlier in 2025, including a 350 basis-point reduction to 18 per cent in November 2025 and a 300 basis-point cut to 25 per cent in July 2025, were predicated on similar macroeconomic improvements.
Lowering interest rates at this stage of the cycle is not merely symbolic; it has real implications for credit availability, investment and economic activity. Ghana’s economy has posted robust GDP growth rates, supported by solid performance in sectors such as agriculture and services, and an external sector stabilised by improved reserves and trade balances. Historical data for 2025 indicated real GDP growth above 5 per cent, with non-oil sectors expanding strongly — factors that have reinforced confidence in continued expansion even as monetary conditions ease.
By reducing the cost of borrowing, the Bank of Ghana is seeking to amplify private-sector credit flows, stimulate investment and cushion consumption, all while maintaining the hard-won gains in price stability.
While the interest-rate cut reflects confidence in current economic momentum, policymakers have emphasised that it does not denote a laissez-faire approach to monetary policy. Senior officials have reiterated that monetary conditions remain relatively tight, and the cut is calibrated to balance inflation control with growth objectives. This caution is consistent with orthodox risk management: easing too quickly could reignite inflation expectations, particularly if external conditions such as commodity price volatility or global financial tightening, were to worsen.
Analysts have suggested that further cuts could be forthcoming, potentially amounting to up to 550 basis points over the course of 2026 if disinflation sustains and growth remains solid.
IGhana is on track to complete a three-year programme of support with the International Monetary Fund in August 2026, a process that has reinforced confidence in the economy’s structural reforms. The IMF programme has focused on fiscal consolidation, debt restructuring and external reserve rebuilding, creating a firmer foundation for independent monetary calibration.
The interplay between domestic policy and external support frameworks highlights a critical point: Ghana’s interest-rate policy is now less about crisis management and more about strategic economic stewardship in a stabilised macroeconomic environment.
The Bank of Ghana’s decision is born of significant progress, yet several risks remain. Global economic uncertainty, potential shifts in commodity markets, and the structural challenges of broadening financial inclusion could temper the impact of looser monetary policy. Moreover, the interplay between fiscal and monetary objectives will continue to require careful coordination to preserve investor confidence and sustain growth.
Nonetheless, the reduction to 15.50 per cent marks a pivotal juncture in Ghana’s economic journey, from stabilisation to growth-centric policy, guided by data and anchored in careful economic governance.
