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The Bank of Ghana’s Monetary Policy Committee (MPC) could reduce the policy rate by 150 basis points to 12.5% at its September 2026 meeting, according to Databank Research.
The investment research firm said the projected cut would align with the continued moderation in inflation towards the Bank of Ghana’s medium-term target range of 8% ±2%.
Databank said Ghana’s monetary policy remained on a cautious easing trajectory during the first half of 2026, despite external shocks, maintaining its expectation of two policy rate cuts during the year.
“Despite external shocks, monetary policy in 1H’26 remained on a cautious easing path, with our expectation of two rate cuts for the year still intact following the first reduction in March 2026, which lowered the policy rate to 14.0 percent,” the firm said.
The projection follows the MPC’s decision to retain the policy rate at 14% in July 2026, after cutting it in March.
Inflation pressures remain, but disinflation continues
Databank said the monetary policy environment continued to support economic activity, although inflationary pressures returned during the first half of the year.
Headline inflation rose to 5.3% in June 2026 from 3.8% in January, largely reflecting renewed price pressures from energy and imported inputs.
However, the research firm noted that monthly inflation remained relatively contained, indicating that the broader disinflation process had not been fully disrupted.
The assessment suggests that the central bank could have room to resume its easing cycle if inflation continues to move towards the target range and external pressures remain manageable.
Private-sector credit transmission improves
Databank also pointed to stronger monetary policy transmission through the banking sector, particularly in private-sector lending.
Private-sector credit growth rose by 41.2% year-on-year in nominal terms and 34.1% in real terms, signalling increased lending activity despite prevailing economic uncertainties.
The banking sector maintained a strong capital position, with the industry-wide Capital Adequacy Ratio (CAR) standing at 20.4%.
Asset quality also improved, as the banking industry’s gross non-performing loan (NPL) ratio declined to 16.1%.
According to Databank, stronger credit growth, adequate capital buffers and improving asset quality create conditions that could support additional monetary easing.
“These underscore solid capital buffers and gradually improving asset quality,” the research firm said.
External shocks could influence September decision
Despite the projected rate cut, Databank said the outlook remains dependent on global and domestic economic developments.
The MPC held the policy rate at 14% in July amid concerns about rising global prices, transport costs and renewed conflict in the Middle East.
The Committee warned that external shocks could generate fresh inflationary pressures, particularly through energy prices and imported goods.
Databank’s forecast therefore assumes that the disinflation trend will remain broadly intact and that external risks will not cause a significant deterioration in price stability.
If implemented, a 150-basis-point reduction would bring the policy rate to 12.5%, potentially lowering borrowing costs and further improving credit access for businesses and households.
It would also represent another step in the Bank of Ghana’s gradual movement towards a less restrictive monetary policy stance following the initial cut in March.
The MPC’s September decision is expected to weigh the need to sustain economic activity against the risk of renewed inflationary pressures.
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