The Bank of Ghana (BoG) has lowered its key rate by 150 basis points, bringing it down from 15.5% to 14%. This reduction is larger than expected by the markets, made possible by the decline in inflation.
This decision, announced at the end of the 129th meeting of the Monetary Policy Committee (MPC) held from March 16 to 18, 2026, marks the continuation of the monetary easing cycle initiated after the debt crisis that had severely destabilized the Ghanaian economy, leading the country to seek support from the International Monetary Fund (IMF).
Annual inflation has significantly slowed to 3.3% in February 2026 – its lowest level since the rebase of the price index in 2021 – compared to 23.1% in February 2025 and over 50% at the end of 2022. This is the 14th consecutive decrease in the inflation rate, supported by the appreciation of the cedi (local currency), the improvement in food supply, and the rigor of the monetary policy conducted over the past two years.
According to Governor Johnson Pandit Asiama, real interest rates remain high despite successive easing, justifying the continuation of the easing cycle. However, he emphasized that the announced reduction is more moderate than previous ones, some of which reached up to 350 basis points during the easing cycle initiated in 2025.
Monetary authorities believe that inflation should remain within the target range of 6% to 10% in the medium term. However, they point out risks to the upside, particularly related to the volatility of oil prices in a context of increasing geopolitical tensions in the Middle East, which could disrupt global supply chains and reignite inflationary pressures.
Increase in economic growth rate
“Domestic economic conditions have improved, with a decrease in inflationary pressures and a renewed confidence among economic actors,” said Dr. Johnson Asiama.
On the macroeconomic front, the outlook is generally encouraging. Real GDP grew by 6.0% in 2025, up from 5.8% in 2024, driven in particular by the services and agriculture sectors. The composite index of real economic activity recorded an annual growth of 8.4% in January 2026. Public debt was reduced to 45.3% of GDP at the end of 2025, down from 61.8% a year earlier, reflecting the extent of the fiscal consolidation effort undertaken under IMF supervision. Foreign exchange reserves stood at $14.8 billion at the end of February 2026, equivalent to 5.8 months of import cover.
Case study
The central bank also highlights the improvement in the banking sector: growth in assets, increase in deposits, decline in non-performing loans – the ratio of non-performing loans (NPL) dropped from 22.6% to 18.7% in one year. It remains high, however, and the Bank of Ghana has implemented specific regulatory measures. Furthermore, the average bank lending rate fell to 19.2% in February 2026, down from 30.1% a year earlier, facilitating a gradual recovery in private sector credit.
Ghana’s recovery is closely watched across the continent. Several African economies facing similar debt crises and high inflation – including Zambia, Ethiopia, and Kenya – see it as a case study in budget consolidation and accelerated disinflation.
