IC Research, the research arm of IC Securities, believes the Bank of Ghana will cut its policy rate for the first time since November 2024 in July 2025.

This is coming after the Monetary Policy Committee (MPC) of the Bank of Ghana increased the policy rate by 100 basis points to 28%.

In its analysis dubbed “A hawkish kick-off to the new regime”, it said the MPC left an open door for a gradual easing in the 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”.

“We think this tone reflects the authorities’ confidence for a faster disinflation in the months ahead as the tighter monetary stance complements the ongoing fiscal disinflation measures. This aligns with our expectation for faster disinflation in the months ahead, which would likely widen the real policy rate from its current 4.9% to over 8.0% by June 2025. Consequently, we maintain our expectation for a first rate cut at the July 2025 MPC meeting”.

In December 2024, IC Research envisaged up to a 200 basis points hike in policy rate at the January 2025 MPC meeting.

Its hawkish call was underpinned by inflation overshooting the International Monetary Fund target in December 2024, which would usually trigger the Monetary Policy Consultation Clause (MPCC) with a likely policy remediation to restore inflation to the target.

However, the action was delayed to assess the fiscal disinflation support in the 2025 budget.