Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama has signaled a strategic shift in the central bank’s monetary policy approach as Ghana continues to experience a downward trend in inflation.
According to the latest data from the Ghana Statistical Service, headline inflation declined to 21.2% in April 2025, marking a significant drop from its peak last year.
Opening the 124th Monetary Policy Committee (MPC) meetings in Accra, the BoG Governor urged members to weigh all macroeconomic indicators carefully before deciding on the next policy direction.
“The inflation outlook, while improving, remains vulnerable to second-round effects, food supply constraints, and external price shocks,” he noted.
“We must carefully assess whether the current monetary policy stance remains adequate to drive disinflation without undermining the fragile growth momentum.”
Dr. Asiama also revealed that the Central Bank is conducting a comprehensive review of its monetary policy implementation framework as part of broader reforms to strengthen policy effectiveness.
“We are transitioning from reliance on the unremunerated Cash Reserve Ratio to a more active Open Market Operations regime,” he announced.
“This includes the use of longer-tenor BoG instruments to improve policy transmission, enhance liquidity management, and support greater credit expansion to the private sector.”
This shift is aimed at improving liquidity control while ensuring that policy tools better reflect market realities and support private sector growth.
Meanwhile Economist and Senior Lecturer at the University of Ghana Business School, Prof. Patrick Asuming, has backed the government’s target of single-digit inflation by mid-2026, calling it realistic given current buffers in the economy.
“Even if government opens the floodgates and spends, there’s enough buffer against inflation. We should still see the inflation trend move downwards,” he said in an interview with GHOne Business.
On the likely outcome of the MPC meetings, Prof. Asuming forecasted no change to the policy rate.
“I expect the Monetary Policy Committee to keep the policy rate unchanged to monitor developments in the economy”
The 124th MPC meetings are expected to conclude on Friday, May 23, 2025, when the BoG will announce its updated policy rate stance and outline the next steps in its disinflation strategy.
Dr. Asiama reiterated that the central bank’s credibility depends on its ability to respond decisively and proportionately to evolving economic realities, especially in the face of both domestic and global uncertainties.
