BoG to cut policy rate by 300 basis points to 25% – IC Research

Accra, Ghana —
The Bank of Ghana (BoG) is likely to implement a 300 basis point reduction in its benchmark monetary policy rate, slashing it from 28% to 25%, according to a new projection by IC Research, the analytical wing of investment bank IC Securities.

The move, if confirmed at the upcoming Monetary Policy Committee (MPC) meeting, would signal a significant shift toward monetary easing—a policy direction aimed at stimulating credit, investment, and growth in the face of moderating inflation.

Why the Anticipated Cut?

According to IC Research, the rationale behind the forecast stems from the recent deceleration in inflation, which stood at 22.8% in May 2025, down from over 40% a year ago. The firm believes the disinflation trend provides a “window of opportunity” for the BoG to reduce the cost of borrowing and further support the ongoing economic recovery.

“We expect the BoG to cut the policy rate by 300 basis points to 25.0% in July 2025,” the IC Research report stated. “This is anchored on consistent downward inflation prints and the cedi’s relatively stable performance.”

Context: Tight Monetary Policy Since 2022

Since the economic turbulence of 2022 and the subsequent IMF bailout program, the Bank of Ghana has maintained a tight monetary stance to control inflation and stabilize the cedi. The policy rate had peaked at 30% in 2023, making credit extremely expensive for businesses and households.

A reduction to 25% would mark one of the most aggressive single cuts in recent memory and a potential turning point in the country’s monetary trajectory.

Implications of the Rate Cut

If the BoG proceeds with the predicted cut, it could have multiple effects on Ghana’s economic landscape:

• Reduced Lending Rates: Commercial banks would likely lower interest rates, easing access to credit for SMEs and consumers.

• Stimulated Economic Activity: Lower borrowing costs could boost private sector investment and consumption.

• Bond Market Repricing: Yields on government securities may adjust, affecting investor behavior and domestic debt dynamics.

However, analysts also caution that the BoG must tread carefully to ensure that currency stability and investor confidence are not undermined.

Upcoming MPC Meeting Under Watch

All eyes are now on the BoG’s MPC meeting, scheduled for late July 2025, where Governor Dr. Ernest Addison is expected to make a formal announcement. Market watchers, investors, and businesses are closely monitoring the decision for signs of Ghana’s next monetary direction.

With the economy showing signs of resilience and inflation on a downward path, IC Research’s projection has stirred optimism. But the central bank’s next move will reveal just how confident it is in the stability it has helped rebuild.