The Monetary Policy Rate (MPR) of the Bank of Ghana is expected do down between 1.0 and 1.5 percentage points at the next Monetary Policy Committee (MPC) meeting next week.

According to IC Research, the decline in inflation to 20.4% in August 2024 and an earlier cut in US interest rate by the Federal Reserve makes a strong case for a cut in the Bank of Ghana’s policy rate.

This is expected to reduce interest rates and cost of borrowing.

The research arm of IC Securities said headline inflation unexpectedly declined in August 2024, raising its anticipation of dovish sentiments at the forthcoming Monetary Policy Committee meeting in late-September 2024.

“The case for policy rate cut gets stronger, given a higher real policy rate and prospect of earlier FED rate cut. At the current inflation rate, Ghana’s ex-post real policy rate rises to 8.6%. This stands at 180bps [basis points] above the December 2023 real policy rate which triggered a 100bps cut at the January 2024 MPC meeting”.

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