The Monetary Policy Committee of the Bank of Ghana has made a bold move to maintain the policy rate at 28 per cent in order to combat inflation. Dr Johnson Asiama, the Governor of the Bank of Ghana, cited risks to inflation as the main reason for this decision.
According to Dr Asiama, the Bank’s latest forecast shows a gradual easing of inflationary pressures, thanks to measures such as a tight monetary policy stance, exchange rate stability, and fiscal consolidation. Headline inflation has already dropped by 2.6 percentage points to 21.2 per cent in April 2025, driven by decreases in both food and non-food inflation.
Despite these positive developments, the Committee believes that inflation is still too high relative to the medium-term target. Therefore, they have decided to maintain the policy rate at 28 per cent to continue the disinflation process. The ultimate goal is to bring inflation down to 12 per cent by the end of the year.
On the bright side, the cedi has shown strong performance against major trading currencies, with significant appreciation in the year to May 21, 2025. Factors such as a tight monetary policy stance, fiscal consolidation, record reserve accumulation, and improved market sentiment have all played a role in the cedi’s success.
The external sector has also seen improvements, with a record provisional current account surplus of $2.1 billion in the first quarter of 2025. This surplus, along with net outflows in the capital and financial account, has led to an overall Balance of Payments surplus of $1.1 billion. Additionally, Gross International Reserves (GIR) stand at $10.7 billion in April 2025, equivalent to 4.7 months of imports of goods and services.
Overall, the Bank of Ghana is taking a proactive approach to combat inflation and ensure stability in the economy. With a strong monetary policy stance and positive external performance, Ghana is on track towards economic resilience and
Ghanaflare.com
