Fitch Solutions anticipates a cautious return to monetary easing by the Bank of Ghana (BoG) in the second half of 2025, projecting a cumulative 200 basis point cut in the benchmark interest rate to 26% by year-end, followed by an additional 300 basis point reduction to 23% in 2026 – marking a cumulative cut of 500bps (5%) in the policy rate.
The forecast is underpinned by a gradual moderation in inflation, relative exchange rate stability, and lower energy prices. The macroeconomic outlook is seen as sufficiently stabilising to allow the central bank to begin loosening its monetary stance after maintaining a restrictive policy for much of the past two years.
The BoG surprised markets in March with a 100 basis point rate hike to 28%, citing the need to “firmly anchor” inflation expectations. The move marked the first Monetary Policy Committee (MPC) decision under the leadership of new Governor Dr. Johnson Asiama, whose hawkish tone has signalled a break from the approach of his predecessor, Dr. Ernest Addison.
Fitch Solutions, however, expects the central bank to shift gears in Q3 2025, initiating cuts “albeit at a cautious pace” as inflation trends downwards and macroeconomic buffers improve.
The firm expects Ghana’s current account surplus to reach a record 6.9% of GDP this year, while foreign exchange reserves are projected to rise from $6.4 billion to $11.5 billion. These dynamics, Fitch asserts, will bolster the BoG’s capacity to manage cedi volatility despite potential bouts of external financial stress.
As such, Fitch Solutions expects the Cedi to end the year at GHS 15.5/$1, with an annual average rate of GHS 15.3/$1.
Norvan Reports
