Professional services firm Deloitte has projected that the Bank of Ghana is likely to implement additional cuts to its monetary policy rate in 2026 as part of ongoing efforts to stimulate economic activity and ease financing constraints.
This outlook was contained in Deloitte’s West Africa in Focus 2025 report, which assessed recent macroeconomic developments and the evolving policy direction of Ghana’s central bank.
According to Deloitte, further reductions in the policy rate could support credit expansion, improve business confidence, and encourage private sector investment. Lower borrowing costs are expected to provide relief to firms and households that have faced tight financial conditions over the past few years. However, the firm cautioned that any easing of monetary policy must be carefully calibrated to avoid unintended consequences for price stability.
Warning Against Excessive Monetary Easing
While acknowledging the benefits of a lower interest rate environment, Deloitte warned that excessive easing of the policy rate could reverse the progress made in controlling inflation. The firm stressed that inflation management remains a delicate task, particularly in an economy that has only recently emerged from heightened price pressures.
“While these reductions are anticipated to alleviate financing constraints and stimulate credit and economic demand, excessive easing could risk reversing the progress made in controlling inflation,” Deloitte noted in the report. The firm added that maintaining macroeconomic stability should remain a priority, even as policymakers seek to support growth.
BoG’s 2025 Policy Actions and Their Impact
In 2025, the Bank of Ghana implemented a cumulative 10 percentage point cut in its policy rate, closing the year at 18 percent per annum. Despite the significant reduction, the monetary policy rate remained relatively elevated, reflecting the central bank’s cautious approach to easing.
Deloitte observed that the policy stance in 2025 contributed positively to macroeconomic outcomes. The cedi strengthened over the period, and inflationary pressures eased as confidence gradually returned to the economy. The interest rate environment, though still tight by historical standards, helped anchor expectations and support currency stability.
Beyond the policy rate, other nominal interest rates across the market also declined sharply in 2025. The 364 day Treasury Bill rate, for instance, fell to 13.06 percent as of November 2025, down from 30.07 percent recorded a year earlier. This marked reduction signaled improved liquidity conditions and growing investor confidence in government securities.
Deloitte noted that lower Treasury Bill rates reduced government borrowing costs and eased pressure on domestic debt servicing. At the same time, the firm emphasized the importance of ensuring that declining rates translate into increased lending to the productive sectors of the economy.
Structural and Regulatory Measures by the Central Bank
The report also highlighted several policy decisions implemented by the Bank of Ghana in 2025 that supported monetary and financial stability. These included adjustments to the net open position for banks, which was revised to a range of 0 percent to plus or minus 10 percent from the previous plus or minus 5 percent. This move was aimed at improving foreign exchange risk management and enhancing flexibility in the banking sector.
In addition, the Cash Reserve Ratio for all banks was required to be held in their respective currencies, a measure designed to strengthen liquidity management and reduce currency mismatches. The central bank also commenced foreign exchange intermediation under the Domestic Gold Purchase Programme, which helped channel additional foreign exchange into the formal financial system.
Risks to Ghana’s Inflation Outlook
Despite the recent gains, Deloitte identified several risks that could threaten Ghana’s inflation outlook in the near to medium term. Among the key concerns are potential increases in utility tariffs, particularly electricity and water, which could feed into broader price pressures. Persistently high domestic food prices also remain a significant risk, given their weight in the consumer price index.
The firm further warned that a possible decline in global gold prices could affect the stability of the local currency and increase imported inflation. As gold exports play a crucial role in supporting foreign exchange inflows, any sustained drop in prices could weaken the cedi and complicate inflation management.
Deloitte concluded that while high interest rates and fiscal discipline could help mitigate some of these risks, policymakers must strike a careful balance in 2026. Further monetary easing should be guided by data and aligned with inflation trends, currency stability, and fiscal developments.
The firm’s outlook suggests that Ghana’s economic recovery remains on track, but sustaining the gains achieved in inflation control will require disciplined and coordinated policy actions. As expectations build for additional rate cuts in 2026, the challenge for the Bank of Ghana will be to support growth without undermining hard won macroeconomic stability.
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