–BY Issah Olegor
The Bank of Ghana (BoG) has convened its 124th Monetary Policy Committee (MPC) meeting, amidst signs of economic stabilization.
The meeting, which took place on May 21, 2025, at the Bank Square in Accra, was attended by honourable members of the MPC, distinguished colleagues, and invited officials.
Economic Progress
The Governor of the BoG, Dr. Johnson Asiama, noted that Ghana’s macroeconomic conditions are exhibiting early signs of stabilization, supported by recent policy actions and improving external and domestic fundamentals.
He cited the decline in inflation, which dropped to 21.2 percent in April 2025, as a significant development.
The cedi has also appreciated sharply by nearly 19 percent between April and May, helping to ease imported inflation pressures and restore public confidence.
Challenges Ahead
Despite the progress, Dr. Asiama emphasized that significant challenges persist.
The inflation outlook remains vulnerable to second-round effects, food supply constraints, and external price shocks.
Geopolitical tensions and evolving global trade dynamics, including the recent US-led tariff disputes, have heightened market uncertainty and could affect commodity prices, exchange rates, and financial flows in emerging markets like Ghana.
Monetary Policy Review
The BoG has commenced a comprehensive review of its monetary policy implementation framework.
The review involves transitioning from reliance on the unremunerated Cash Reserve Ratio to a more active Open Market Operations regime, including the use of longer-tenor BoG instruments.
This is intended to enhance policy transmission, improve liquidity management, and allow greater room for credit expansion to the private sector.
Key Questions
The MPC will carefully assess whether the current monetary policy stance remains adequate to drive disinflation without undermining the fragile growth momentum. Key questions to be addressed include:
– Is the observed exchange rate appreciation sustainable?
– How durable is the nascent return of market confidence?
– What are the implications of these dynamics for the inflation forecast over the medium term?
