The Bank of Ghana (BoG) has embarked on a comprehensive review of its monetary policy framework, with a focus on adopting more dynamic tools to manage liquidity and support private sector growth. To achieve this, the Central Bank will prioritize enhanced Open Market Operations (OMO), including the use of longer-tenor BoG instruments. This move marks a shift away from reliance on the unremunerated Cash Reserve Ratio towards a more active OMO regime.
Governor Dr. Johnson Asiama explained that the review aims to strengthen policy direction and sustain disinflation efforts without undermining the fragile economic recovery. “This is intended to enhance policy transmission, improve liquidity management, and allow greater room for credit expansion to the private sector,” he said at the opening of the 124th MPC meeting in Accra.
Dr. Asiama noted that while inflation is easing, it remains susceptible to several external factors, including second-round effects, persistent food supply disruptions from northern Ghana and the Sahel region, and external price shocks due to volatile global commodity markets. “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 ours,” he added.
In addition to the monetary policy review, the Bank of Ghana has signaled plans to deepen key monetary and regulatory reforms to sustain the recent momentum of the cedi, which has appreciated by nearly 19 percent year-to-date. “The appreciation reflects a combination of factors, including prudent monetary policy, improved market sentiment, and external sector gains,” Dr. Asiama said.
Leave a Comment