People at the Agbogbloshie market look on, as supporters of Ghana's main opposition party, the National Democratic Congress (NDC), gather in Accra, Ghana, November 28, 2024. REUTERS/Francis Kokoroko

By Emmanuel Bruce

ACCRA (Reuters) -Ghana's central bank cut its main interest rate by 350 basis points to 18.0% on Wednesday, citing an improved economic outlook and expectations for further declines in consumer inflation.

Economists polled by Reuters had forecast a 250 basis points cut after a record 350 basis point reduction to 21.5% at the previous monetary policy committee meeting in September.

The bank has now lowered its main interest rate by a cumulative 1,000 basis points in 2025, following cuts of 300 basis points in July and 350 basis points in September.

Policymakers said the aggressive easing was aimed at supporting economic recovery and expansion, while safeguarding price stability.

"In taking the policy decision, the view of the monetary policy committee was that overall, macroeconomic conditions have broadly improved, given the anticipated significant decline in inflation," Bank of Ghana Governor Johnson Asiama told a news conference.

Ghana's consumer inflation has fallen sharply from a record 54% in January 2023 to 8% year-on-year in October.

Asiama said the bank projected a continued stable inflation outlook around its target band of 8% with a margin of error of 2 percentage points either side, well into the first half of 2026.

He added that the bank had also decided to return to the use of the 14-day bill as its main instrument for conducting open market operations.

Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Bank, said the cut was in line with expectations, with further easing seen as bond issuance resumes.

"It demonstrates a very measured approach by the Bank of Ghana, and that they are considering the long term, and are unwilling to depart from macro stability," Khan said.

(Reporting by Emmanuel Bruce and Christian Akorlie. Writing by Ayen Deng Bior. Editing by Bate Felix and Mark Potter)