The Bank of Ghana has slashed its benchmark interest rate by 300 basis points to 25%, signaling renewed confidence in the country’s macroeconomic recovery, as reported by Ghana News Agency.

Governor Dr. Johnson Pandit Asiama announced the move following the central bank’s 125th Monetary Policy Committee meeting in Accra, citing easing inflation, a stronger cedi, and improving business sentiment. “Macroeconomic conditions have significantly improved, inflation expectations are broadly anchored, external buffers have strengthened, and confidence in the economy is returning,” he said.

Headline inflation dropped to 13.7% in June, the lowest since December 2021, down from 18.4% the previous month. The disinflation was supported by tight monetary policy, fiscal consolidation, easing food supply constraints, and currency appreciation.

The cedi strengthened markedly during the year to July 25, gaining 40.7% against the U.S. dollar, 31.2% against the pound, and 24.2% against the euro. A $3.4 billion current account surplus in the first half of 2025, driven by strong gold and cocoa exports, helped boost reserves.

Economic growth also gained momentum, with Q1 GDP expanding by 5.3%, up from 4.9% a year earlier. Non-oil GDP grew by 6.8%, driven by agriculture and services. High-frequency indicators point to continued expansion, while inflation is projected to fall within the 8 ± 2% target range by year-end.

Short-term interest rates have declined sharply, easing government borrowing costs. Meanwhile, monetary growth remains subdued due to strong liquidity management and reduced public sector borrowing.

The banking sector showed improvements in solvency, liquidity, profitability, and efficiency. Recapitalization efforts and stricter credit standards are expected to enhance resilience.