The Bank of Ghana’s Monetary Policy Committee (MPC) has announced key policy decisions to stabilize the national economy.
The announcement followed the conclusion of the 123rd regular MPC meeting, which assessed recent economic developments and the risks to inflation. The Governor of the Bank of Ghana, Dr. Johnson P. Asiama, outlined various economic measures to ensure financial stability and economic growth.
The global economic environment remains challenging due to trade and policy uncertainties. The escalating tariffs introduced by the United States have impacted global economic forecasts, causing slowdowns in the world’s two largest economies, the U.S. and China. These challenges have negatively affected global growth and inflation trends, necessitating proactive policies by national economies, including Ghana.
Despite global economic instability, Ghana’s economy has shown signs of resilience. The Bank’s Composite Index of Economic Activity (CIEA) rebounded, and the Ghana Purchasing Managers’ Index surpassed the 50-benchmark in February 2025, indicating increased business activity. Improved consumer and business confidence, along with a recovery in private sector credit, are positive indicators for the nation’s economic trajectory.
Ghana’s external sector remains strong, primarily driven by rising gold exports, growth in remittances, and ongoing IMF-backed reforms. The Gold-for-Reserve programme has significantly contributed to increased foreign exchange reserves, reinforcing the stability of the national currency.
The banking sector has remained relatively stable, despite heightened credit risks. The Bank of Ghana’s latest risk assessment shows improvements in solvency, liquidity, and profitability. However, the prevalence of non-performing loans remains a challenge that requires continued regulatory oversight to maintain financial stability.
The fiscal stance in 2024 was notably expansionary, creating liquidity concerns. High liquidity levels pose a threat to the disinflation process. The government has signaled a strong commitment to fiscal consolidation, but the MPC insists on the necessity of monetary policy restraint to prevent economic overheating.
Headline inflation has declined slightly but remains a pressing concern. Food and non-food inflation rates are still above expectations. The Bank of Ghana attributes inflation persistence to supply-side constraints and past fiscal missteps. A strict monetary policy is required to curb inflationary pressures.
To address inflation concerns, the MPC has raised the Monetary Policy Rate by 100 basis points to 28.0 percent. This measure aims to re-anchor the disinflation process and maintain economic stability. The Bank of Ghana remains open to reassessing policy adjustments should inflation stabilize in the future.
In addition to adjusting the policy rate, the Bank of Ghana has introduced several liquidity management measures, including:
• A 273-day financial instrument to enhance liquidity control.
• Stricter monitoring of banks’ Net Open Positions (NOPs) to ensure compliance.
• A review of the Cash Reserve Ratio (CRR) to evaluate its impact on liquidity and financial intermediation.
Business and consumer confidence indicators have improved, signaling a positive economic outlook. Surveys conducted in early 2025 showed optimism among businesses and consumers about the future of the economy, driven by improved economic conditions and government interventions.
Private sector credit is beginning to recover, recording a 26.9 percent annual growth in February 2025, a significant improvement from the 5.1 percent growth recorded in February 2024. In real terms, credit growth stood at 3.1 percent, contrasting with the 14.7 percent decline seen in the previous year.
Ghana’s export sector saw a 50.0 percent annual growth, mainly due to increased gold and cocoa exports. However, crude oil exports declined due to lower production levels. Imports grew by 7.3 percent year-on-year, reflecting increasing demand in various sectors.
The Ghanaian cedi has remained relatively stable due to improved remittance inflows and the Domestic Gold Purchase Programme. As of March 26, 2025, the cedi had depreciated by only 5.3 percent against the U.S. dollar, a notable improvement compared to the 7.6 percent depreciation recorded in the same period last year.
The MPC emphasized the need for continued fiscal discipline and proactive monetary policy to sustain economic stability. The Bank of Ghana remains committed to strengthening the economy through strategic interventions, ensuring long-term economic resilience and growth. The latest policy decisions reflect the government’s dedication to addressing inflation, managing liquidity, and fostering economic development.
