Goldman Sachs is warning the Ghanaian Government against delaying talks with the International Monetary Fund (IMF) for a bailout.

According to the American-based research body, any further delay in talks with the IMF will be dire for the Ghanaian economy.

“In our recent trip to Accra, one notable observation was the authorities’ perceived lack of urgency in concluding programme talks with the IMF (with locals expecting a 6-9 month timeframe), despite intensifying BoP, FX and fiscal financing pressures.

“We have argued that a delayed conclusion creates the risk of further deficit monetization by the BoG, Cedi depreciation and a decline in FX reserves, implying that the macroeconomic outlook may deteriorate further in the near term,” Goldman Sachs Research warned.

The Research body continued: “That said, we think that these factors — namely currency pressure and the inability to finance the deficit — may serve to increase the sense of urgency and ultimately prompt the authorities to accelerate IMF talks. In this regard, we will look for any update from BoG on IMF talks in its communique following tomorrow’s unscheduled rate-setting meeting.”


The Monetary Policy Committee of the Bank of Ghana (BoG) is holding an emergency meeting on Wednesday August 17, 2022 to review recent development in the economy, an official statement has said.

The meeting is coming on the back of the recent hike in inflation from 29.8% to 31.7%.

Some analysts had earlier called on the Central Bank told an emergency meeting following the development.

Wednesdays meeting will among others also focus on the depreciation of the cedis which depreciated by 30 percent alone in July.

A statement issued by the Bank of Ghana on Monday August 15, 2022 said the emergency meeting will conclude with an announcement of the decision of the Committee.

The Monetary Policy Committee (MPC) of the Bank of Ghana (BoG) on Monday (25 July) maintained the policy rate at 19% amid increases in oil and food prices.

Policy rate expected to go up

However, Goldman Sachs Research has also predicted the Bank of Ghana has no option than to increase the policy rate 200bp policy rate hike to 21%.

“In our view, inflation and financial stability risks stemming from this FX weakness combined with the challenging domestic financing environment for the government which has led the BoG to begin monetizing the deficit have prompted the call for this meeting.

“We expect the MPC to announce a 200bp policy rate hike to 21% and see a meaningful upside risk to this forecast, given the extent of FX and domestic financing pressures,” the Research Institution stated.

It explained that the MPC maintained the policy rate at 19.0% at its July meeting in a dovish policy surprise (consensus: 20%; GS: 21%), on account of growth headwinds and slowing sequential inflation prints.

“Since then, headline inflation (year-on-year) surprised to the upside in July and was stable in sequential terms at +3.1%mom (+37.2% in annualized terms), a very elevated rate relative to the BoG’s 8%+/-2pp target.”

Source: Ghana/