Bank of Ghana Slashes Policy Rate to 21.5%, Offers Relief for Businesses
The Bank of Ghana has cut its benchmark interest rate by 350 basis points to 21.5 percent, one of the steepest reductions in recent years, signaling a shift toward stimulating growth.
The decision, announced after the Monetary Policy Committee (MPC) meeting, follows easing inflation and improved foreign reserves, creating room for looser monetary conditions. Inflation has steadily declined, supported by a firmer cedi and lower food prices.
For businesses, the cut could be transformative. Lower policy rates typically drive down commercial lending rates, easing credit costs for enterprises long constrained by double-digit interest charges. Small and medium-sized enterprises (SMEs), in particular, stand to benefit as reduced borrowing costs unlock new opportunities for investment, expansion, and working capital.
Manufacturers and traders facing high input costs may gain improved access to financing for inventories and equipment, while cheaper credit in agriculture could help farmers scale up ahead of the next planting season, boosting food supply and price stability.
The policy shift also holds promise for households. Lower loan and mortgage rates could lift consumer spending, strengthening demand in retail, housing, and services.
By lowering the cost of capital, the Bank of Ghana aims to energize private sector activity, complementing government fiscal consolidation measures and supporting job creation.
