Cedi Rally Drives Inflation to Four-Year Low, Fuels Policy Easing Outlook

Ghana’s inflation rate fell sharply in July to its lowest level in almost four years, driven by currency strength and easing price pressures across key consumer categories.

The decline strengthens expectations of further monetary policy easing by the Bank of Ghana in the coming months.

Annual inflation slowed to 12.1% in July from 13.7% in June, according to data released Wednesday by Government Statistician Alhassan Iddrisu in Accra.

The figure came in below the 12.4% median estimate of five economists surveyed by Bloomberg. On a monthly basis, consumer prices rose by 0.7%.

The deceleration was supported by gains in the Ghanaian cedi, which has appreciated by 39% against the U.S. dollar this year, making it one of the best-performing currencies globally.

The rally has been underpinned by a surge in global prices for gold and cocoa—two of Ghana’s top export commodities—which have boosted foreign exchange reserves and investor confidence.

Food inflation fell to 15.1% in July from 16.3% in June, while non-food inflation eased to 9.5% from 11.4%, reflecting broad-based disinflation across categories.

The decline in inflation follows the Bank of Ghana’s record 300 basis-point interest rate cut last week, which brought the benchmark policy rate down to 25%.

Governor Johnson Asiama said at the time that the central bank remains data-dependent but would consider additional cuts if inflation continued to decline.

“The monetary policy committee will continue to assess incoming data and likely reduce the policy rate further should the disinflation trend continue,” Asiama stated.

The central bank now projects inflation will return to its 6%–10% target range by the end of 2025, revising its earlier forecast of March 2026.

The stronger-than-expected July inflation print increases the likelihood of further reductions at the MPC’s next rate-setting meeting scheduled for September 17.

Ghana, Africa’s largest gold producer and the second-largest cocoa grower globally, has benefited significantly from higher commodity prices this year. These gains have helped ease external pressure on the cedi and supported domestic price stability.

The latest data will likely boost investor confidence in Ghana’s economic recovery path following recent fiscal and external imbalances.

The International Monetary Fund continues to support the country through its extended credit facility programme, under which Ghana is pursuing structural reforms and fiscal consolidation.

The Bank of Ghana is expected to maintain a cautious but accommodative stance as it seeks to balance inflation control with the need to support growth in a post-restructuring economic environment.