The Governor of the Bank of Ghana, Dr Johnson Asiama, has hinted at a potential further cut in the policy rate if the recent downward trend in inflation persists in the coming months.

According to him, Ghana’s key economic indicators have shown steady improvement, creating room for a possible rate cut to support economic growth.

At its 125th meeting, the Monetary Policy Committee (MPC) reduced the policy rate by 300 basis points, from 28% to 25%, in response to the improving inflation outlook.

Speaking at a post-MPC roundtable discussion organised by the Chartered Institute of Bankers (CIB) Ghana on August 5, 2025, Dr Asiama said the Committee is closely monitoring inflation data for July and August before making its next decision.

“We may have to cut ahead if what we are seeing continues. July inflation is coming out sometime this week. We are all waiting to see what the number will be. If it goes down further, and August inflation also eases, then certainly the next MPC decision could be another cut,” he said.

Responding to questions on why the Bank did not opt for a more aggressive rate cut, Dr Asiama explained the importance of balancing risks when making monetary policy decisions.

“The question is, why not cut by 600 basis points? The answer lies in managing both upside and downside risks. For example, if the cedi depreciates again, perhaps due to a surge in international food prices caused by geopolitical factors, then the upside risks to inflation increase. So, we take a cautious approach by weighing all these risks,” he explained.

Dr Asiama, however, expressed optimism about the outlook, saying the policy rate is expected to decline further by the end of the year.

“But certainly, we expect that by the end of the year, the rate will be quite low,” he said.



SP/MA

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