Ghana Reduces Benchmark Interest Rates by Three Percentage Points as Inflation Abates
On Wednesday, Ghana’s central bank announced a reduction in its benchmark interest rate by three percentage points, prompted by diminishing inflationary pressures, as the West African nation emerges from a profound economic crisis.
The Bank of Ghana declared that its benchmark rate would decrease from 28 percent to 25 percent the first such reduction in over a year coinciding with the recovery of the cedi currency against the dollar.
“We remain steadfast in our commitment to our price stability mandate while fostering conditions conducive to sustainable growth,” stated the bank’s governor, Johnson Pandit Asiama.
Although prices continue to rise in Ghana, a leading producer of cocoa and gold, inflation moderated in June to 13.7 percent year-on-year marking the sixth consecutive monthly decline.
Simultaneously, the cedi has appreciated by over 40 percent against the US dollar since the beginning of 2025, bolstered by robust external buffers, increased exports, and heightened investor confidence.
Earlier this month, the International Monetary Fund acknowledged Ghana’s progress in economic reforms and debt restructuring initiated by the government following President John Mahama’s inauguration in January amidst economic turmoil.
While food inflation has also eased, it remained above the overall inflation rate in July, registering at 16.3 percent.
Despite these advancements, many ordinary Ghanaians have faced hardship as the cost of living continues to rise.
According to the “Jollof Index” from SBM Intelligence, a consultancy based in Lagos, the cost of preparing a pot of jollof rice a West African staple consisting of rice, vegetables, and meat has increased from 278 cedis in January 2023 to 420 cedis ($26 to $40) as of June 2025, although prices have recently stabilized.
“Households have experienced marginal increases in disposable incomes due to reduced fuel and transport costs, in contrast to 2023 and 2024,” noted SBM’s latest report.
