Dr. Johnson Pandit Asiama, the Governor of the Bank of Ghana, who announced the rate at a press briefing following the conclusion of the MPC’s 125th regular meetings in Accra, said the decision was reached on the back of significant improvements in the economy.

“Overall, the Committee noted that macroeconomic conditions have significantly improved, inflation expectations are broadly anchored, external buffers have strengthened, and confidence in the economy is returning,” he said.

Dr Asiama said the July forecast also showed that headline inflation was expected to decline further in the third quarter of 2025, and trend within the medium-term target of 8±2% by the end of 2025, earlier than initial projections.

“However, there are upside risks to the inflation outlook, which include potential supply chain challenges emanating from global trade tensions and upward adjustment in utility tariffs,” he said.

These notwithstanding, the impact of these risks on inflation are expected to be offset by appropriately tight monetary policy stance and continued fiscal consolidation.
He said the Committee would continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue.

The Committee remains committed to the price stability mandates while creating conditions for inclusive and sustainable growth.
The meetings evaluated recent economic developments and risks to the inflation outlook.

He said alongside the slower growth prospects, the pace of disinflation had moderated, and in response, financial conditions remain restrictive with potential spillover to emerging markets and developing economies.

However, the improved domestic macroeconomic conditions are expected to moderate the risks from the global economy.

On the domestic front, the economy was buoyant in the first quarter of 2025, with an annual GDP growth of 5.3 percent, compared to 4.9 per cent in the same quarter of 2024, driven by increased activity in the agriculture and services sectors.

He said excluding oil, the economy grew by 6.8 percent compared to 4.3 per cent over the same comparative period. Beyond the first quarter, the Bank’s high frequency real sector indicators pointed to sustained pickup in economic activity.
He said the latest business and consumer confidence surveys reflected improved sentiments on the back of easing inflationary pressures and strong optimism about economic conditions.

The Governor said since the last MPC meeting, headline inflation has declined further to 13.7 per cent in June 2025 from 18.4 percent in May, the lowest reading since December 2021.
He said the deceleration was underpinned by the tight monetary policy stance, fiscal consolidation, easing food supply constraints, as well as the strong recovery of the cedi.

” In line with the easing underlying inflation pressures, the Bank’s main core inflation measure, which excludes energy and utility items, has declined markedly,” he added
He said the growth in monetary aggregates remained subdued during the first half of the year, primarily due to the tight monetary policy stance, strong liquidity management, and reduced government borrowing.

Dr Asiama said in line with the disinflation process and easing inflation expectations, interest rates at the short end of the money market had declined sharply, and in turn, reduced the cost of government borrowing.

He said in the banking sector, the Financial Soundness Indicators reflected continued asset growth, improved solvency, liquidity, profitability and efficiency in the first half of the year.

The Governor said continued improvement in the economic conditions, ongoing recapitalisation efforts from capital injections and profits, coupled with the implementation of strict credit underwriting standards should enhance resilience in the banking sector.
He said the external sector has improved markedly, with a record current account surplus ofUS$3.4 billion in the first half of 2025, supported mainly by higher prices and increased production volumes of gold and cocoa.

The sector’s outlook was positive, anchored on favourable commodity prices and improved remittance inflows, despite the resumption of external debt service.

On the back of the strong external sector performance and increased reserve accumulation, the cedi has further strengthened against the major trading currencies.

In the year to 25 July 2025, the cedi appreciated by 40.7% against the US dollar, 31.2% against the British pound, and 24.2% against the euro.

“The Committee remains committed to he price stability mandate, while creating conditions for inclusive and sustainable growth,” Dr Asiama added.