MPC cut the policy rate to 21.5%
The Bank of Ghana (BoG) has stated that its recent policy rate reduction is expected to start easing borrowing costs for households and businesses in the economy by October 2025.
According to the Director of Research at the Central Bank, Dr Philip Abradu-Otoo, commercial banks are likely to adjust their lending rates downward following the Monetary Policy Committee’s (MPC) decision to cut the benchmark rate to 21.5%.
He explained this in an interview on JoyNews on September 18, 2025.
BoG explains complex factors behind policy rate decisions
Dr Philip Abradu-Otoo pointed out that a similar rate cut earlier in July triggered a 2.5 percentage point reduction in interest rates, a sign that this latest move could bring even sharper relief for borrowers.
“We anticipate some significant cuts in bank lending rates. The aim is to lower the cost of credit, support businesses, and ultimately benefit consumers,” Dr Abradu-Otoo said.
The Central Bank has faced criticisms from some analysts who argue the move could weaken inflation control efforts.
Dr Abradu-Otoo defended the policy stance, saying Ghana’s economic fundamentals provided the room to act.
“Our reserves remain robust, the cedi is stable, and growth is gathering pace. The data shows inflation will remain in single digits despite the policy rate adjustment,” he stressed.
The latest data from the BoG showed a decline in Non-Performing Loans (NPLs) to 20.8%, down from 24.8%.
The bank said it is implementing measures to further strengthen the banking sector and improve credit delivery.
“We are confident the NPL situation will improve in the coming months. The focus now is to channel more credit into productive sectors to drive growth,” Dr Abradu-Otoo added.
The BoG maintains that the policy rate cut is designed to reinforce recovery momentum, while ensuring financial stability.
SSD/AE
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