IC Research, the research arm of IC Securities, forecasts that the Bank of Ghana will cut its policy rate for the first time since November 2024, with the likely reduction set for July 2025.
This follows a recent decision by the Monetary Policy Committee (MPC) of the Bank of Ghana to increase the policy rate by 100 basis points to 28%. In its analysis, titled “A Hawkish Kick-Off to the New Regime,” IC Research noted that the MPC left the door open for a gradual easing of its policy stance as inflation becomes firmly anchored.
“We do not rule out a first cut in 3Q2025. Reassuringly, the MPC left an open door for a gradual easing in the policy stance as inflation becomes firmly anchored,” the report stated.
The research firm expressed confidence that a faster disinflation trend would emerge in the coming months, driven by the tighter monetary policy and ongoing fiscal disinflation measures. It added that this could widen the real policy rate from its current 4.9% to over 8.0% by June 2025, reinforcing the expectation of a policy rate cut at the July 2025 MPC meeting.
In December 2024, IC Research had anticipated a 200 basis points hike in the policy rate at the January 2025 MPC meeting, following inflation overshooting the International Monetary Fund’s target in December 2024. This would typically trigger the Monetary Policy Consultation Clause (MPCC), leading to policy adjustments aimed at restoring inflation to the target.
However, this action was delayed to assess the impact of fiscal disinflation measures included in the 2025 budget.