PUBLIC

BANK OF GHANA
MONETARY POLICY COMMITTEE
PRESS RELEASE
17 September 2025

Good afternoon, ladies and gentlemen of the press.

The Monetary Policy Committee (MPC) held its 126th meeting from September 15 –
17, 2025, to evaluate recent economic developments and assess risks to the outlook
for inflation and growth. This briefing summarises the key discussions and the
Committee's decision on the monetary policy stance.

Contrary to earlier projections of a global economic slowdown, growth has been
resilient supported by a modest tapering of the tensions associated with the tariff wars,
robust exports in the first quarter of the year, easing credit conditions, and fiscal
expansion in some Advanced Economies. Against this backdrop, the IMF revised its
global growth projections for 2025 to 3.0 percent, compared with earlier forecast of 2.8
percent. This notwithstanding, geopolitical uncertainties, relatively high tariffs and
projected decline in global trade could dampen near-term growth prospects. Global
inflation is expected to decline amid lower food and energy prices, as well as a
slowdown in employment growth. In addition, global financing conditions have eased
somewhat supported by declining policy rates, lower long-term bond yields, and a
strong rebound in portfolio flows to emerging market and developing economies.
Current global conditions and uncertainties have led to a strong rebound in gold prices
with positive implications for Ghana’s external sector position.

On the domestic front, the economy continues to demonstrate strong growth, driven
largely by the services and agriculture sectors. The latest release from the Ghana
Statistical Service for the second quarter of 2025 shows the economy posting a real
GDP growth of 6.3 percent compared with 5.7 percent recorded in the same quarter
of 2024. Excluding oil, GDP grew at a much faster pace by 7.8 percent relative to 5.7
percent over the same comparative period. The services sector grew by 9.9 percent,
while the agriculture sector expanded by 5.2 percent.

The Bank’s high frequency indicators continue to point to sustained momentum in
economic activity. The Composite Index of Economic Activity (CIEA) recorded an
annual growth of 6.1 percent in July 2025 compared to 1.9 percent in July 2024, on
the back of international trade activities, consumption, and industrial production. The
latest confidence surveys conducted in August 2025 also reflected sustained
improvement in sentiments. Consumer confidence remained strong, despite some
softening of the index, while business confidence further picked up as firms met their
short-term targets and expressed optimism about company and industry prospects.
Similarly, Ghana’s Purchasing Managers’ Index (PMI) went up in August, signalling
increase in new orders as business conditions improved.

PUBLIC
Inflation continues to ease and has been broad-based. Headline inflation declined
further to 11.5 percent in August 2025, down from 12.1 percent in July, the lowest
reading in four years. The sustained decline in inflation for eight consecutive months
was largely driven by a combination of factors, including the prudent monetary policy
stance, strong liquidity management, appreciation of the cedi, fiscal consolidation, and
improved food supply. The Bank’s main core inflation measure, which excludes energy
and utility items, also declined, reflecting continued easing of underlying inflationary
pressures. Similarly, inflation expectations among consumers, businesses, and the
banking sector all eased, affirming the disinflation process going forward.

Interest rates are declining on the money market in response to the recent cut in the
monetary policy rate. Yields on the money market instruments have declined
significantly and the average lending rates are gradually easing, which should lower
the cost of credit in the near-term. The interest equivalent of the 91-day treasury bill
instrument eased from 13.4 percent at the end of July 2025 to 10.3 percent at the end
of August 2025. The average lending rate over the same period went down from 26.6
percent to 24.2 percent.

Fiscal policy implementation in the year to July 2025 reflected strong consolidation
efforts underpinned by tight expenditure controls, although revenues fell short of
target. Consequently, the overall fiscal deficit on commitment basis was 1.1 percent
of GDP, outperforming the target deficit of 2.1 percent of GDP. Also, the fiscal anchor,
that is, the primary balance on commitment basis, recorded a surplus of 1.0 percent
of GDP, reflecting a better outturn than the targeted surplus of 0.5 percent of GDP.
The deficit was largely financed from domestic sources. At end-July 2025, the total
public debt stood at 44.9 percent of GDP down from 61.8 percent of GDP at endDecember 2024.

The banking sector recorded strong performance over the first eight months, with
continued asset growth and improved profitability, asset quality, and efficiency
indicators. The industry’s Capital Adequacy Ratio (CAR), without regulatory reliefs,
increased to 17.7 percent in August 2025, from 10.2 percent in August 2024. The
industry’s Non-performing Loan (NPL) ratio improved to 20.8 percent compared to
24.8 percent last year, due to growth in bank credit and contraction in NPL stock. This
notwithstanding, elevated credit risk remains a major concern. In the outlook,
adherence to the recapitalisation plans and full implementation of the Bank’s
regulatory guidelines to lower NPLs will further enhance resilience of the banking
sector.

The external sector strengthened in the first eight months of 2025, with a significant
trade surplus of US$6.2 billion, compared to US$2.1 billion recorded during the same
period in 2024. This was driven by a sharp increase in exports earnings, mainly gold
and cocoa, which far outpaced import growth. The reserve position remained strong
with Gross International Reserves at US$10.7 billion (4.5 months of import cover) as
at end August 2025, compared with US$8.98 billion (4.0 months of import cover) at
end-December 2024. In the outlook, the external sector is projected to broadly remain
resilient, anchored on favourable commodity prices and improvement in remittance
inflows.

PUBLIC
On the back of the strong external sector performance and increased reserve
accumulation, the cedi strengthened against the major trading currencies in the year
to July 2025. Subsequently, the cedi came under some demand pressure, bringing the
cumulative appreciation through 12 September 2025 to 21.0 percent against the US
dollar. The cedi remains among the strongest currencies globally year-to-date,
reflecting
prudent
monetary
policy,
effective
liquidity
management,
fiscal
consolidation, and increased foreign exchange inflows.
Given the current state of macroeconomic conditions, the view of the Committee was
that inflation will continue to ease in the near term. In the outlook, headline inflation is
expected to drop to within the medium-term target of 8 ± 2 percent by the end of the
fourth quarter. However, the possible upward review of utility tariffs could exert some
price pressures in the medium term. Notwithstanding this, maintenance of an
appropriate monetary policy stance, strong sterilisation efforts, ongoing fiscal
consolidation, and adequate reserve buffers should sustain the disinflation process.
Given these considerations, the Committee, by a majority decision, voted to lower the
Monetary Policy Rate by 350 basis points to 21.5 percent. The Committee will continue
to monitor macroeconomic developments and take the appropriate policy decision as
and when necessary to reinforce the disinflation process.
Additional Measure
The Net Open Position Limits for banks have been adjusted as follows:
• Single currency NOP limit is revised from ± 5 percent to between 0 percent
and –10 percent, effective 1 October 2025.

END.

Informational Note
The next Monetary Policy Committee (MPC) meeting is scheduled for 17 November
2025. The meeting will conclude on 19 November 2025, with the announcement of the
policy decision.