The Monetary Policy Committee (MPC) of the Bank of Ghana has maintained the policy rate at 28 per cent in order to consolidate gains made in controlling inflation and supporting currency stability.
The Governor of the Bank of Ghana, Dr Johnson Asiama, told journalists in Accra last Friday that the decision was driven by the central bank’s latest forecast, which indicated a continued easing of inflationary pressures, supported by a tight monetary policy stance, relative exchange rate stability, and ongoing fiscal consolidation.
He explained that the headline inflation fell to 21.2 per cent in April 2025, representing a 2.6 percentage point and attributed the decline to a mix of tight monetary policy, enhanced liquidity management, reduced ex-pump petroleum prices, and a stable cedi.
“Inflation is expected to ease faster towards the medium-term target in the first quarter of 2026 as opposed to the second quarter as earlier envisaged, barring unanticipated shocks,” Dr Asiama noted, adding that the apex bank is targeting an end-of-year inflation rate of 12 per cent.
He stated that the MPC noted that the current inflation level remains above target and emphasised the importance of holding the policy rate steady to reinforce the ongoing disinflation process.
“Under the circumstances, the Committee, by a unanimous decision, maintained the policy rate at 28.0 percent,” he said.
Highlighting the cedi’s strong performance as a key development, the governor noted the local currency, which had faced persistent pressure in previous years, has appreciated significantly in 2025, adding that as of May 21, it had gained 24.1 per cent against the US dollar, 16.2 per cent against the British pound, and 14.1 per cent against the euro.
According to the governor, this resurgence has been driven by tight monetary policy, improved market sentiment, record foreign exchange reserves, fiscal discipline, and stronger regulatory oversight of the forex market.
The report by the Daily Graphic quotes the governor as saying that improvements in the external sector, including a provisional current account surplus of US$2.1 billion in the first quarter of 2025, was largely due to higher gold and cocoa prices, rising export volumes, and robust remittance inflows.
The governor explained that ths development helped to generate a balance of payments surplus of US$1.1 billion, while Gross International Reserves rose to US$10.7 billion by April 2025, equivalent to 4.7 months of import cover.
He added that the Bank of Ghana would remain vigilant and committed to maintaining macroeconomic stability while ensuring the disinflation process is sustained over the coming quarters.