The Bank of Ghana’s Monetary Policy Committee (MPC) held its 124th meeting at the Bank Square in Accra.
In his opening remarks, Dr. Johnson Asiama, Governor of the Bank of Ghana, noted that Ghana’s macroeconomic conditions are exhibiting early signs of stabilization, supported by recent policy actions and improving external and domestic fundamentals.
Dr. Asiama highlighted that inflation has declined to 21.2 percent in April 2025, down from previous highs, but still above the medium-term target band of 8 ± 2 percent. He attributed this moderation to a combination of monetary tightening, relative exchange rate stability, and easing non-food inflation.
The Governor emphasized that the Committee’s decision to raise the policy rate by 100 basis points to 28 percent in March has contributed to dampening inflation momentum.
He also noted that the cedi’s sharp appreciation by nearly 19 percent between April and May has helped ease imported inflation pressures and restore public confidence.
Dr. Asiama highlighted several encouraging signs of macroeconomic progress, including Ghana reaching a Staff-Level Agreement with the IMF on the Fourth Review of the ECF Programme and an upgrade of Ghana’s sovereign rating from Selective Default to CCC+ by S&P. He also noted that external reserves have strengthened, the trade balance has improved, and consumer and business confidence indices are rising steadily.
However, Dr. Asiama cautioned that significant challenges persist, including the inflation outlook remaining vulnerable to second-round effects, food supply constraints, and external price shocks. He also noted that geopolitical tensions and evolving global trade dynamics could affect commodity prices, exchange rates, and financial flows in emerging markets like Ghana.
The Governor announced that the Bank has commenced a comprehensive review of its monetary policy implementation framework, transitioning from reliance on the unremunerated Cash Reserve Ratio to a more active open Market operations regime. This is intended to enhance policy transmission, improve liquidity management, and allow greater room for credit expansion to the private sector.
Dr. Asiama posed several key questions for the Committee to consider, including whether the observed exchange rate appreciation is sustainable, how durable the nascent return of market confidence is, and what the implications of these dynamics are for the inflation forecast over the medium term.
The Governor emphasized the critical role of the post-meeting communiqué in clearly articulating the rationale behind policy decisions and providing a transparent account of recent economic trends. This is essential for anchoring expectations and sustaining public trust in the Bank’s commitment to price stability.
Dr. Asiama concluded by emphasizing the importance of professionalism, rigor, and independence in the Committee’s deliberations. He noted that the Committee’s credibility depends on its ability to respond decisively and proportionately to evolving economic realities.
