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Ghana’s central bank could deliver a sharp cut in interest rates at a meeting it pulled forward to this week, after inflation cooled significantly in the West African nation.

The Bank of Ghana announced late Wednesday that policymakers would hold an “emergency” meeting on Thursday and deliver their decision on Friday, shifting the date forward from July 30. The bank declined to comment beyond its announcement.

Economists surveyed by Bloomberg expect it to lower the benchmark interest rate to 25.5% from 28% after annual inflation slowed to 13.7% in June, the lowest level since December 2021, from 18.4% the previous month. Such a reduction would be the largest in more than two decades, though not everyone agrees it will move with such aggression. Yields on the central bank’s 56-day bills, which it uses for liquidity management, collapsed by 10 percentage points to 18% on July 14, days after the inflation data was published. “We expect market interest rates will move down even faster,” said Razia Khan, chief economist for Africa and the Middle East at Standard Chartered Plc.

She predicts the policy rate will be cut by 300 basis points, which “should help ease very onerous debt service costs.”

The central bank left rates unchanged at 28% at its May meeting after unexpectedly hiking by 100 basis points in March. The tight monetary policy stance, together with an appreciating currency, has helped tilt inflation expectations downward. Bringing the rate decision forward shows “the central bank may want to bring its key lending rate more in line with the current environment to avoid sending mixed signals about where it sees inflation and interest rates heading,” said Leeuwner Esterhuysen at Oxford Economics.

“Lowering it would help reduce borrowing costs and support the economy, especially as business confidence improves and macro conditions stabilize,” said Esterhuysen, who expects the bank will cut by 200 basis points this week.

The cedi is the best performer against the dollar worldwide this year after the Russian ruble among currencies tracked by Bloomberg.

“The moving forward of the monetary policy committee meeting and the drop in the yield on the 56-day bills indicate that the Bank of Ghana is bringing forward its monetary easing envisaged for the second half of the year,” said Mark Bohlund, a senior credit analyst at REDD Intelligence, who foresees a rather cautious 100 basis point cut.

“This caution would be largely to gauge the market reaction with more aggressive cutting likely in September and November if the current dynamics in the inflation and foreign exchange market are maintained,” he said.