By Leo Nelson
Ghana’s economic journey post-tightening phase steers towards stability as Databank Research projects the Bank of Ghana (BoG) keeping its policy rate steady at 28% during the upcoming Monetary Policy Committee (MPC) meeting running from May 21 to May 23, 2025.
Anticipating a scenario of easing inflation rates and adjustments in monetary policies targeting price stability, Databank Research indicates a cautious approach by the central bank, evaluating the impacts of previous rate hikes on inflation and overall economic performance. Following a 100-basis-point policy rate increment to 28.0% in March 2025, the BoG stands poised to monitor the effects before making further decisions.
With inflation showing signs of steady disinflation, Databank foresees a settling range of 17-19% by mid-2025, driven by base effects and sectoral price stability. These promising trends may pave the way for potential monetary easing later in the year, possibly leading to improved credit accessibility for businesses.
As BoG remains focused on anchoring inflation before considering policy adjustments, market watchers and analysts await further economic data ahead of the May 2025 MPC meeting. The central bank’s commitment to ensuring stable prices aligns with Databank’s stance, indicating a calculated approach towards policy changes.
In parallel to rate adjustments, BoG has implemented measures to enhance liquidity management and boost the effectiveness of monetary policy within the banking sector – including the introduction of a 273-day bill and tightened supervision of banks’ foreign currency exposures.
As the landscape evolves, all eyes are on inflation data and economic indicators for insights into the future trajectory of interest rates. For now, the prevailing consensus suggests a stable policy rate of 28%, waiting for sustained disinflation signals to guide the next steps.