Accra, March 18, – The Bank of Ghana (BoG) has cut its policy rate by 150 basis points to 14 per cent, citing robust domestic economic conditions and historically low inflation, despite heightened geopolitical tensions in the Middle East.
Dr Johnson Pandit Asiama, Governor of the Central Bank, announced the reduction during the 129th Monetary Policy Committee (MPC) briefing in Accra on Wednesday, reassuring markets that the move would not derail the country’s disinflation process.
At 14 per cent, the policy rate is the lowest since July 2021, when it stood at 13.5 per cent, after which successive hikes peaked at 30 per cent in September 2023.
Dr Asiama explained that prevailing real interest rates allowed for monetary policy accommodation without compromising the Bank’s price stability mandate. He noted a sustained recovery across key indicators, including a decline in headline inflation to 3.3 per cent in February 2026, well within the medium-term target of 6–10 per cent.
“The bank’s latest forecast shows inflation remaining within the target band. Risks include potential pass-through from rising crude oil prices and geopolitical uncertainty, but domestic economic fundamentals remain strong,” he said.
The Governor highlighted Ghana’s outstanding economic performance, with the composite index of economic activity rising 8.4 per cent in January 2026, compared with six per cent in 2025. Provisional data for 2025 showed a fiscal deficit of 1 per cent of GDP, well below the 2.8 per cent target, while the primary balance recorded a 2.6 per cent surplus of GDP.
He added that public debt declined to 45.3 per cent of GDP at the end of December 2025 from 61.8 per cent in 2024, thanks to fiscal consolidation, debt restructuring, and nominal GDP growth.
The banking sector also strengthened, with assets rising 57.5 per cent year-on-year, and improvements in profitability, liquidity, solvency, asset quality, and operational efficiency. Non-performing loans dropped to 18.7 per cent in February 2026, from 22.6 per cent a year earlier.
Trade and reserves also improved, with a trade surplus of US$3.7 billion in the first two months of 2026, compared with US$2.1 billion in the same period of 2025. Gross international reserves rose to US$14.8 billion, equivalent to 5.8 months of import cover.
Dr Asiama said the rate cut is expected to lower borrowing costs, stimulate private sector credit, and support continued economic growth. However, he cautioned that geopolitical tensions in the Middle East could affect external stability, emphasizing the Bank’s readiness to take necessary measures to protect price stability.
GHBUSS
March 18, 2026
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