The Monetary Policy Committee (MPC) of the Bank of Ghana is expected to cut the policy rate by 150 basis points to 12.5% when it meets in September 2026, Databank Research has projected.
The anticipated reduction would be the second rate cut this year and would reflect the continued moderation of inflation towards the Bank of Ghana’s medium-term target range of 8% ± 2%, the research firm said.
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Databank Research said monetary policy remained on a cautious easing path during the first half of 2026, despite external pressures affecting the economy.
Despite external shocks, monetary policy in 1H’26 remained on a cautious easing path, with our expectation of two rate cuts for the year [2026] still intact following the first reduction in March 2026, which lowered the policy rate to 14.0%,” it stated.
The research firm, however, noted that inflation had picked up during the period, rising from 3.8% in January 2026 to 5.3% in June 2026.
According to Databank Research, the increase reflected renewed price pressures arising from energy costs and imported inputs, although monthly inflation remained relatively contained.
It said improved financial conditions had also begun supporting the transmission of monetary policy to the economy, particularly through increased credit to the private sector.
Private sector credit growth rose to 41.2% year-on-year in nominal terms and 34.1% in real terms, indicating stronger credit expansion despite the relatively cautious monetary policy stance.
The banking sector also continued to maintain strong capital buffers and showed signs of improving asset quality.
The industry-wide Capital Adequacy Ratio (CAR) stood at 20.4%, while the gross non-performing loan (NPL) ratio improved to 16.1%.
These indicators underscore solid capital buffers and gradually improving asset quality,” Databank Research said.
MPC holds rate at 14%
The MPC kept the policy rate unchanged at 14% at its July 2026 meeting, after cutting the rate in March.
The Committee cited continued risks to the inflation outlook, including rising global prices, higher transport costs and renewed conflict in the Middle East.
The decision to maintain the rate at 14% reflected the MPC’s cautious approach as it assessed the impact of external shocks on domestic inflation and economic activity.
However, with inflation still within the Bank of Ghana’s medium-term target range and financial conditions improving, Databank Research expects the MPC to resume its easing cycle in September.
A 150-basis-point reduction would bring the policy rate to 12.5%, potentially lowering borrowing costs further and supporting private-sector credit and economic activity.
