The Bank of Ghana’s July 2025 Monetary Policy Committee (MPC) meeting ended with an unanticipated 300-basis-point cut in the Monetary Policy Rate (MPR). This slashed the rate from 28% to 25%, surprising many market watchers.
It is anticipated that the development will result in a reduction in the average lending rate. Already, the July policy rate cut has led to a significant reduction in the Ghanaian Reference Rate. It is expected that the transmission will continue to reach the bank counters.
But what may be even more telling than the cut itself is how each of the six MPC members voted.
Each six members of the committee expressed interesting views for their decision with varying degrees of caution, optimism, and nuances.
Below is how the members voted, as compiled by The High Street Journal from the decision of the committee.
A House Almost United: 5 Votes for 300 bps Cut
Five out of six MPC members voted for a 300 basis point cut, citing strong disinflation, cedi appreciation, and sustained macroeconomic stability as the main drivers.
These members pointed to the headline inflation plunging from 23.8% in December 2024 to 13.7% in June 2025, marking six straight months of decline.
A remarkable 40.7% year-to-date appreciation of the cedi was profound in all the analysis of members in addition to the budget deficit of just 0.7% of GDP, well below target.
Reserves reaching US$11.1 billion, covering nearly 5 months of imports.
The view that ran through these five members was that Ghana’s macro fundamentals are rebounding fast, and the real interest rate, which is above 11%, provides room to ease monetary tightening without derailing inflation control.
“The cedi’s performance has been strong, recording a year-to-date appreciation of 40.7 percent, driven by strong reserve buildup with inflows from the Gold for Reserve Programme, cocoa proceeds, and forex purchases. The continued accumulation of reserve buffers and strict enforcement of market conduct rules is expected to sustain the gains made on the forex market, moderate the exchange rate pass-through to inflation, and anchor inflation expectations,” a member recounted.
The Lone Dove: A More Conservative Cut
Only one MPC member opted for a more cautious 250-basis-point cut, to bring the policy rate to 25.5%.
The reason? Though impressed by the improved macro outlook and faster-than-expected inflation decline, he warned that several upside risks remain.
The member was cautious about the potential tariff hikes, especially in utilities and petroleum products, and in addition to global uncertainty, including oil price pressures and trade tensions.
Moreover, the member feared, the lagging credit growth could be worsened by premature loosening.
“I will vote conservatively to lower the policy rate by 250 basis points to 25.5 percent. At the same time, I will want to add that should the third quarter inflation numbers come in lower than expected, I will consider a steeper lowering of the policy rate at the September MPC round of meetings,” he member reasoned.
Forward Guidance and Market Signaling
While the vote was not unanimous in scale, all six members signaled support for further rate cuts if disinflation persists. This sends a clear message to markets that the BoG is open on easing the rate, but cautiously with eye firmly on inflation expectations.
Members stressed the importance of forward guidance to help anchor market behavior and expectations as Ghana moves from crisis response into macroeconomic recovery.
Why This Matters
The rare public breakdown of MPC votes gives Ghanaians, investors, and analysts a transparent view into the BoG’s decision-making at a crucial economic turning point.
With inflation falling, the cedi strengthening, and business confidence returning, the central bank is shifting gears from survival to support.
But with one vote for a more moderate cut, it’s also a reminder: the recovery is still young, and policy caution is imperative.
In summary, 5 members voted for a 300bps cut to 25.0% and 1 member voted for a 250bps cut to 25.5%. All members support forward guidance for future cuts if disinflation continues.
