The Bank of Ghana's Monetary Policy Rate declined to 14.0% in August 2026, down from 25.0% in August 2025, according to the central bank. The Interbank Weighted Average Rate fell sharply to 10.2% from 23.3% a year earlier, which reinforced the central bank's accommodative stance.
Commercial banks' average lending rate eased to 15.9% from 24.2% in August 2025, signalling improved credit conditions for households and businesses seeking financing. Despite the aggressive reduction in nominal rates, the Bank of Ghana noted that real interest rates remained broadly positive during the review period.
TREASURY BILL YIELDS FALL SHARPLY
Yields on short-term government debt dropped across the curve. The 91-day Treasury bill rate fell to 5.4%, the 182-day rate to 7.3% and the 364-day rate to 12.2%, against 10.3%, 12.3% and 13.1% respectively a year earlier.
The central bank attributed the decline to sustained investor demand at the short end of the yield curve and ongoing government efforts to reduce domestic financing costs. Rates on medium- to long-term government securities, including 2-year, 5-year and 20-year bonds, remained broadly unchanged because of limited trading activity.
FROM TIGHTENING TO A CUTTING CYCLE
The expansionary stance marks a deliberate pivot from the aggressive tightening cycle of 2022 and 2023. A 75-basis point cut brought the real interest rate to approximately 11.45%, which the central bank described as still decisively positive and well above neutral.
At 14.75% (a real rate of about 11.45%), the Bank of Ghana described the Monetary Policy Rate as comfortably restrictive, providing meaningful insulation against upside risks while beginning a normalisation that the macroeconomic data supported. At that Monetary Policy Committee round, one member voted for a larger cut of 150 basis points to bring the rate directly to 14.0%.
OUTPUT GAP AND INFLATION BACKED EASING
A Bank of Ghana document stated that the output gap supports easing. It added that economic activity, although strong, remains below potential, though the gap is closing.
Headline inflation declined in January and February, driven mainly by food inflation, while core inflation measures showed varying trends. Results from surveys, yield curve analyses and model-based inflation expectations have all decreased.
SEPTEMBER HOLD AND CONDITIONS FOR FURTHER CUTS
The Bank of Ghana has kept its policy rate at 14% for a third consecutive meeting, as rising global tensions and disruptions to supply chains pose fresh risks to inflation. Governor Johnson Asiama announced the decision after the Monetary Policy Committee's meeting in Accra on Thursday.
Asiama has repeatedly emphasised that the easing cycle is data-dependent, with future adjustments contingent on sustained disinflation and adherence to fiscal targets. The ongoing IMF extended credit facility requires strict adherence to revenue mobilisation targets and expenditure controls. The banking sector is also still navigating the aftermath of the debt exchange, which eroded capital buffers.
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