The Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, has indicated that the Monetary Policy Committee (MPC) may consider a gradual reduction in the policy rate as inflation continues to decline faster than the Bank projected.
He made the remarks in his opening address at the 127th MPC meeting. Dr. Johnson Asiama said inflation has dropped to 8.0 percent, now within the Central Bank’s target band, while core inflation stands between 5 and 7 percent, with expectations firmly anchored.
He noted that the pace of disinflation has pushed real interest rates sharply higher, creating room for a carefully calibrated easing cycle, one of the main issues the Committee is expected to examine.
According to the Governor, the Committee’s initial conditions are the strongest in several years. The exchange rate has remained stable throughout 2025, supported by improved confidence and reforms in foreign exchange operations.
Ghana’s gross reserves have risen to US$11.41 billion, equivalent to 4.8 months of import cover, and are projected to reach five months by year-end.
He added that the real sector has shown broad improvement, with GDP growing 6.3 percent in the first half of the year and non-oil GDP rising 7.8 percent.
High-frequency indicators also point to stronger economic activity and improved sentiment among households and businesses.
Despite these gains, the Governor of the Bank of Ghana said the MPC’s rate decision must be made carefully to preserve credibility.
“As inflation declines faster than projected, real interest rates have risen sharply. Staff analysis shows scope for gradual easing, but the balance must preserve credibility and avoid undermining the disinflation gains,” he said.
Dr Johnson Pandit Asiama listed three key areas for the MPC’s assessment: the pace of disinflation and the appropriate real interest rate path, the performance of the FX market and reserve diversification strategy and emerging risks in the financial sector, including asset-quality concerns and recapitalisation needs in a few institutions.
Dr. Johnson Asiama said Ghana may be entering a sustained period of price stability, with inflation expected to settle between 4 and 6 percent by the end of the year and remain within target through 2026.
Money supply growth has moderated and credit conditions are beginning to ease, adding to the case for a future policy adjustment.
The Governor emphasised that the MPC’s task is to support the ongoing recovery while safeguarding stability.
“Our decisions today must reinforce confidence, signal predictability and keep the economy on its path toward higher and job-rich growth,” he said.
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