The Bank of Ghana (BoG) is expected to reduce its Monetary Policy Rate once again in September 2025, a move that could bring additional relief to businesses and households struggling with the high cost of borrowing.
According to IC Research, the research division of IC Securities, favorable macroeconomic developments are creating room for the central bank to continue with its easing cycle. “We see a strong possibility for another cut in September 2025 as favorable crop harvest and ongoing cedi appreciation pass-through sustains the disinflation to widen the real policy rate beyond the latest level of 11.3%,” IC Research stated in its latest report.
The central bank had already cut its base lending rate to 25.00% in July 2025, a significant reduction of 300 basis points, after inflation eased consistently for five months. Analysts believe that the positive trend in disinflation, combined with strengthening currency dynamics, makes another reduction almost inevitable.
Disinflation and the Cedi’s Strength
The projected September cut is anchored on two key factors: continued disinflation and the appreciation of the cedi. Ghana has seen a remarkable slowdown in inflation, largely driven by stable food prices and reduced import costs. A favorable harvest season is expected to further stabilize food prices, while the strengthening of the cedi against major trading currencies has helped to ease import inflation.
IC Research notes that these developments have widened the real policy rate to over 11%, leaving the BoG with space to slash nominal rates without undermining the central bank’s commitment to price stability. “We projected policy easing to commence at the July 2025 MPC meeting with at least 300 basis points reduction in the nominal rate,” the research firm said.
Perhaps the most significant projection from IC Research is the possibility of Ghana reaching single-digit inflation by the end of 2025. This would mark a major milestone for the economy, considering the volatility of inflation rates in the past three years.
The report, however, cautions that uncertainties remain, particularly with the expected utility tariff hikes in the fourth quarter of 2025. Such upward adjustments in electricity and water tariffs could temporarily reverse disinflationary gains. For this reason, IC Research believes the central bank will maintain a cautious approach even as it leans toward policy easing.
Relief for Borrowers and Businesses
For businesses and individuals, another reduction in the policy rate will translate into lower lending rates. This will ease the cost of credit, stimulate investments, and boost consumer spending. Many firms, especially small and medium-sized enterprises (SMEs), have struggled with high borrowing costs in the past few years, limiting their ability to expand operations or recover from the shocks of the Domestic Debt Exchange Programme (DDEP).
A further cut in September could provide the much-needed financial breathing space. Lower lending rates will allow companies to secure working capital at a reduced cost, while households could also see relief in loan repayments and mortgage financing.
The positive outlook for monetary policy coincides with encouraging signs from Ghana’s banking sector. According to IC Research, the industry’s recovery has reached near pre-DDEP solvency levels, with the Capital Adequacy Ratio (CAR) improving sharply to 18.2% in June 2025. This rebound has been achieved without regulatory reliefs, reflecting the resilience of banks and ongoing capital restoration efforts.
The Ghanaian government’s recent capital injection into the National Investment Bank (NIB) has also contributed to this recovery, while privately-owned banks have made significant progress in strengthening their balance sheets.
However, IC Research cautions that asset quality remains an area of concern, and further regulatory intervention may be necessary to ensure stability in the sector.
The anticipated September 2025 policy rate cut by the BoG underscores a shift toward a more supportive monetary environment as inflation slows and the cedi holds firm. While risks remain—particularly with potential utility tariff hikes and global trade uncertainties—the outlook is increasingly optimistic.
For Ghana’s private sector, especially SMEs, continued policy easing could unlock new growth opportunities, stimulate credit expansion, and help accelerate economic recovery. For households, it means cheaper loans and improved financial relief.
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