Bank of Ghana maintains policy rate at 28% to fight inflation 

The Monetary Policy Committee of the Bank of Ghana has maintained the policy rate at 28 per cent, citing risks to inflation.

At a media briefing to announce the rate, Dr Johnson Asiama, the Governor of the Bank of Ghana, said the Bank’s latest forecast pointed to continued easing of inflationary pressures on the back of tight monetary policy stance, exchange rate stability, and fiscal consolidation. 

Headline inflation has declined in the first four months of the year by 2.6 percentage points to 21.2 per cent in April 2025, driven by both food and non-food inflation. 

A confluence of factors, including tight monetary policy stance, stepped-up liquidity sterilization efforts, downward revisions in ex-pump petroleum prices, and exchange rate stability have supported the gradual decline in inflation.

He said inflation was 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.

He said the Bank was targeting inflation to end the year at 12 per cent.

“Despite these positive developments, the Committee observed that the current level of inflation remains high relative to the medium-term target and will require maintaining the tight stance to reinforce the disinflation process,” Dr Asiama said.

“Under the circumstances, the Committee, by a unanimous decision, maintained the policy rate at 28.0 per cent,” he added.

On the performance of the cedi, the Governor said the cedi had rebounded strongly against the major trading currencies driven by a combination of factors, including tight monetary policy stance, ongoing fiscal consolidation, record reserve accumulation, strict enforcement of foreign exchange market rules, and improved market sentiment. 

In the year to May 21, 2025, the cedi had appreciated against all the major currencies -24.1 per cent against the US dollar, 16.2 per cent against the British pound, and 14.1 per cent against the euro.

He said the Central Bank would do everything to ensure the stability of the cedi going forward.

Dr Asiama said the external sector continued to improve, with a record provisional current account surplus of $2.1 billion in the first quarter of 2025, driven mainly by higher prices and increased production volumes of gold and cocoa, and strong remittance inflows. 

The current account surplus, together with net outflows in the capital and financial account, resulted in an overall Balance of Payments surplus of $1.1 billion, he said.

The strong external performance resulted in significant reserve accumulation with Gross International Reserves (GIR) at $10.7 billion in April 2025, equivalent to 4.7 months of import of goods and services. 

Source: GNA

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