Fitch: BoG likely to hold policy rate at 28% despite inflation drop

The Bank of Ghana (BoG) is expected to maintain its benchmark policy rate at 28% during today’s emergency Monetary Policy Committee (MPC) meeting, according to forecasts from Fitch Solutions.

Despite easing inflationary pressures and calls for monetary policy loosening, Fitch’s research arm, affiliated with Fitch Ratings, believes the central bank will hold its position until there is clearer evidence of sustained disinflation.

In March, the BoG surprised markets with a 100-basis-point rate hike, citing lingering inflation risks. However, with inflation dropping to 13.7% in June, the case for a rate cut is building. Ghana now has one of the highest real interest rates in Africa’s frontier markets.

Fitch suggests that if inflation and macroeconomic trends continue to improve, the BoG could begin cutting rates by September 2025, potentially bringing the rate down to 24–25% by year-end, slightly below Fitch’s current forecast of 26%.

The ongoing decline in inflation has been supported by a stable cedi and strong external sector performance. The local currency has held steady since May, thanks in part to a rise in international reserves, which hit $7.9 billion in April, covering nearly four months of imports.

This reserve growth is driven by increased gold export revenues and rising global gold prices, as demand surges amid global geopolitical uncertainties.

The BoG’s decision today will be closely watched by investors, businesses, and policymakers looking for signs of a shift in Ghana’s tight monetary policy stance.