Ghana’s Latest Interest Rate Decision: A Data-Driven Analysis and Macro Outlook
The Bank of Ghana’s recent interest rate decision, announced on November 26, 2025, marks a significant shift in monetary policy. The benchmark rate was cut to 18.00%, below market expectations of 18.25%, and down sharply from the previous 21.50%. This report leverages the Sigmanomics database to contextualize this move against historical trends, assess its macroeconomic implications, and explore forward-looking scenarios amid evolving domestic and external conditions.
Table of Contents
The Bank of Ghana’s decision to lower the policy rate to 18.00% represents a notable easing stance, the first since rates peaked at 29% in July 2024. This 3.50 percentage point cut from September’s 21.50% signals a pivot towards supporting growth amid easing inflation pressures. The move comes as Ghana’s economy faces a complex interplay of slowing inflation, fiscal consolidation efforts, and external headwinds from global commodity markets and geopolitical tensions.
Drivers this month
- Inflation easing: CPI inflation slowed to 14.20% YoY in October, down from 17.50% in July.
- Currency stabilization: The Ghanaian cedi (GHS) stabilized against the USD after sharp depreciation in early 2025.
- Fiscal tightening: Government budget deficit narrowed to 6.80% of GDP in Q3 2025, down from 9.20% in 2024.
Policy pulse
The 18.00% rate remains well above the 8% inflation target, reflecting cautious optimism. The central bank balances inflation risks with growth needs, signaling a gradual normalization after aggressive hikes in 2024.
Market lens
Immediate reaction: The Ghanaian cedi appreciated 0.70% against the USD within the first hour post-announcement, while 2-year government bond yields fell by 40 basis points, reflecting market approval of the easing stance.
Core macroeconomic indicators underpin the interest rate decision. Inflation, growth, and fiscal metrics have evolved considerably over the past year, shaping the central bank’s approach.
Inflation trends
Inflation has moderated from a peak of 29% in July 2024 to 14.20% in October 2025, driven by lower food and energy prices. The 12-month average inflation now stands at 18.50%, down from 25.30% a year ago.
GDP growth
Real GDP growth slowed to 3.10% YoY in Q3 2025, compared to 5.40% in Q3 2024, reflecting tighter financial conditions and subdued external demand. The IMF projects 3.50% growth for 2025 overall.
Fiscal policy & budget
Fiscal consolidation efforts have reduced the budget deficit from 9.20% of GDP in 2024 to an estimated 6.80% in Q3 2025. Revenue mobilization improved by 12% YoY, while expenditure growth slowed to 5% YoY.
Drivers this month
- Inflation deceleration (-11.30 pp YoY since July 2024)
- Improved fiscal metrics reducing inflationary pressures
- External commodity price stabilization supporting currency
Policy pulse
The rate cut aligns with a gradual easing cycle, aiming to balance inflation control with growth support. The central bank remains data-dependent, with inflation still above target.
Market lens
Immediate reaction: Ghanaian government bond yields dropped sharply, with the 2-year yield declining 40 basis points. The GHS strengthened, reflecting improved investor confidence.
This chart highlights a clear reversal of the tightening trend that dominated 2024. The policy rate’s downward trajectory suggests a shift toward supporting economic recovery while monitoring inflation risks.
Looking ahead, Ghana’s monetary policy faces multiple scenarios shaped by domestic and external factors. The central bank’s cautious easing signals confidence but leaves room for adjustment.
Bullish scenario (30% probability)
- Inflation falls below 10% by mid-2026
- GDP growth accelerates above 5%
- Fiscal deficit narrows below 5% of GDP
- Further rate cuts to 15% by Q3 2026
Base scenario (50% probability)
- Inflation stabilizes around 12-14%
- Growth remains moderate at 3-4%
- Fiscal deficit steady near 6-7%
- Policy rate holds near 18% with gradual easing
Bearish scenario (20% probability)
- Inflation rebounds above 16% due to supply shocks
- Growth stalls below 2%
- Fiscal slippage widens deficit above 8%
- Potential rate hikes back toward 21% to contain inflation
External risks include commodity price volatility and geopolitical tensions affecting trade and investment. Domestically, structural reforms and fiscal discipline remain critical to sustaining gains.
The Bank of Ghana’s November 2025 interest rate cut to 18.00% reflects a pivotal moment in monetary policy. It balances easing financial conditions with the need to anchor inflation expectations. Historical data from the Sigmanomics database confirms this as the most significant easing move since the 2024 tightening cycle. Forward-looking risks remain, but the policy stance supports a cautiously optimistic growth outlook.
Investors and policymakers should monitor inflation trends, fiscal discipline, and external shocks closely. The central bank’s data-driven approach suggests flexibility, with room to tighten or ease as conditions evolve.
Key tradable symbols linked to Ghana’s interest rate dynamics include:
- GHBANK – Ghanaian banking sector sensitivity to interest rate changes.
- GHSGHS – Ghanaian cedi exchange rate fluctuations post-rate decisions.
- BTCUSD – Cryptocurrency as an alternative asset amid local currency volatility.
- MTNGH – Telecommunications sector impacted by macroeconomic conditions.
- USDGHS – USD/GHS pair reflecting capital flows and monetary policy shifts.
Key Markets Likely to React to Interest Rate Decision
The Bank of Ghana’s rate cut will influence multiple asset classes. The Ghanaian banking sector (GHBANK) typically responds to changes in lending rates and credit growth. Currency pairs such as GHSGHS and USDGHS will reflect shifts in capital flows and investor sentiment. The telecommunications sector (MTNGH) is sensitive to economic growth trends. Additionally, cryptocurrencies like BTCUSD may gain interest as alternative stores of value amid currency volatility.
Extras: Interest Rate vs. GHBANK Stock Performance Since 2020
Since 2020, GHBANK’s stock price has shown a strong inverse correlation with Ghana’s benchmark interest rate. Periods of rate hikes, such as mid-2024, corresponded with stock price declines of up to 15%, while easing phases like the current one have supported rebounds near 10%. This dynamic underscores the sensitivity of Ghana’s banking sector to monetary policy shifts and highlights GHBANK as a key barometer for investors tracking interest rate trends.
FAQs
- What was the latest interest rate decision for Ghana?
- The Bank of Ghana cut the policy rate to 18.00% on November 26, 2025, down from 21.50% in September 2025.
- How does this decision impact inflation and growth?
- The rate cut aims to support growth while inflation remains above target at 14.20% YoY, signaling cautious easing.
- What are the key risks facing Ghana’s monetary policy?
- Risks include inflation rebound due to supply shocks, fiscal slippage, and external commodity price volatility.
Takeaway: Ghana’s interest rate cut to 18.00% marks a strategic pivot toward growth support amid easing inflation, but vigilance remains essential given persistent macro risks.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The interest rate cut to 18.00% contrasts sharply with the 21.50% rate in September and the 12-month average of 25.30%. This marks the steepest single cut since the 2024 hiking cycle began.
Historical data from the Sigmanomics database shows that rates held steady at 27% from November 2024 through May 2025 before the recent decline. The current level is the lowest since early 2024, signaling a clear policy shift.