The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) could slash its policy rate by 300 basis points to 25%, driven by June’s sharp inflation decline to 13.7%, according to a new forecast by IC Research.
“We maintain a dovish outlook for the July MPC meeting, raising our expected cut in the policy rate to at least 300bps [basis points] from our initial anticipation of at least 200bps cut,” IC Research stated.
The research and market intelligence arm explained that with the real policy rate widening to 14.3% in June 2025 from 9.6% in May, and core inflation now firmly in single digits, the central bank has room for a deeper cut.
However, IC Research cautioned against excessive easing that could destabilise the currency in the medium term.
“We opt to stay cautious on the expected dovishness in order to consolidate FX stability and avert a second-round effect from likely higher fuel levy in 3Q2025.”
Recent BoG Policy Decisions
The MPC maintained the policy rate at 28% in May 2025, with Governor Dr. Johnson Asiama emphasising the need to consolidate gains in reducing inflation while supporting currency stability.
The decision, he said, was based on forecasts of continued easing of inflationary pressures, underpinned by tight monetary policy, relative exchange rate stability, and ongoing fiscal consolidation efforts.
Analysts note that yields and lending rates have fallen since the last MPC meeting, indicating market alignment with a potential policy rate cut to boost private sector borrowing and growth.
Background: What is IC Research?
IC Research is the dedicated economic and market research unit of IC Securities, a leading investment banking, securities trading, and asset management firm in West Africa. The unit provides macroeconomic, equity, and fixed-income research to guide clients’ investment decisions, known for its data-driven insights, timely forecasts, and influential market intelligence reports covering Ghana and the sub-region.
If the BoG implements the expected cut at its upcoming meeting, it will mark the largest policy rate reduction in recent years, a move that could further lower lending costs for businesses and households, while testing Ghana’s recent currency stability gains.
