In brief
- Monetary easing with bullish views on disinflation. Ghana’s MPC delivered another deep but cautious 350bps cut in the policy rate to 18.0%, reinforcing our observation of its commitment to maintaining a double-digit real policy rate and keeping monetary conditions firmly restrictive despite a bullish inflation outlook. With the BOG’s latest forecast pegging the end-2025 inflation between 4.0% – 6.0% and within the 6.0% – 10.0% target band through 1H2026, the Committee signalled growing confidence that disinflation is firmly anchored. While we broadly concur with this outlook, we remain alert to the upside risk from the multi-year utility tariff hike expected in 1Q2026. Nonetheless, the authorities appear confident that any price pressures will emerge from below the lower band and remain contained within the target.
- Easing advances, but policy stays tight and tactical. The MPC’s 350bps cut extends the easing cycle, yet we expect real rates to rise above 12.0% by end-2025 as disinflation deepens. We foresee a likely pause in January 2026 to pre-empt a potential second-round inflationary effect from utility tariff hike. The reintroduced 14-day BOG bill signals a pivot to active liquidity management after years of structural liquidity mop-ups, relieving interbank Cedi tightness and preparing the market for the Treasury’s 2026 bond return. We expect softer money market yields and lower borrowing costs via a compressed Ghana Reference Rate (GRR), while FX stability continues to hold under firm BOG oversight of banks’ dollar positions and strong reserves.
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