Deloitte West Africa has indicated that the high cost of funds in Ghana will persist due to the high-interest rate environment.

In its February 2025 Monetary Policy Update, the professional services firm said the high non-performing loans pose risks to banking sector stability.

It also expressed concerns about that elevated inflation rate of 23.5% in January 2025 and global economic uncertainties, saying they are threat to economic growth.

“Persistent rise in food inflation, largely driven by climate-related factors and supply chain disruption is also a concern”, it added.  

The Bank of Ghana maintained its monetary policy rate at 27% in January 2025 to counter inflation risks and boost economic growth.

The rationale was due to heightened inflation environment, with upside risks stemming from the food sub index.

Again, tight monetary conditions continue to anchor inflation expectations and reduce core inflation.

Implications of Monetary Policy Rate

The implications of the 27% policy rate, it said, are limited credit available to the real sector of the economy and the widening of the positive rate of real return due to a decline inflation.

It concluded that a cedi appreciation would boost investor confidence in foreign exchange market.