The Ghana Association of Banks (GAB) is expressing optimism about a potential reduction in the monetary policy rate as the Bank of Ghana’s (BoG) Monetary Policy Committee (MPC) convenes for its 123rd meeting from March 24 to March 26, 2025. The financial sector eagerly anticipates a decision that could provide much-needed relief to businesses and consumers facing high borrowing costs.
With the policy rate currently standing at 27% and inflation easing to 23.1% in February, GAB President Kwamina Asomaning believes economic conditions justify a rate cut. Speaking at the Association’s 2025 Cocktail and Networking Session, Asomaning highlighted key factors supporting a potential adjustment, including stabilizing market conditions, a resilient local currency, and a moderation in food price inflation.
“The policy rate typically follows inflation trends, and with inflation stabilizing around 23%, market watchers are assessing whether expectations have tempered enough for policymakers to act,” Asomaning stated.
“We have seen a stable currency and a slowdown in food price increases. If the BoG determines that inflation expectations have cooled, there is a strong basis for a policy rate reduction.” He added
A policy rate cut would have broad implications, influencing lending rates across the financial sector. Lower rates could ease borrowing costs for businesses and households, stimulating economic activity and providing a boost to key industries.
The 123rd MPC meeting marks the first under newly appointed BoG Governor Dr. Johnson Asiama. The committee will review economic data and announce its policy decision on Friday, March 28, 2025.
Financial analysts are closely monitoring the discussions, particularly as Treasury Bill rates continue to decline and economic indicators point to a more favourable outlook. A rate cut would align with the broader macroeconomic strategy to foster growth while maintaining financial stability.
As Ghana’s economy navigates a post-inflationary recovery phase, all eyes are on the BoG’s decision, which could signal the start of a more accommodative monetary policy stance.
