The Bank of Ghana’s Monetary Policy Committee (MPC) has voted unanimously to maintain the benchmark policy rate at 28.0%, citing persistent inflationary risks despite growing signs of economic recovery and external sector stability.
Addressing journalists after the 124th MPC meeting, Governor Dr. Johnson Pandit Asiama outlined a cautiously optimistic macroeconomic outlook, driven by improvements in consumer confidence, strong external balances, and ongoing fiscal consolidation.
“The latest forecast points to continued easing of inflationary pressures on the back of tight monetary policy stance, exchange rate stability, and fiscal consolidation,” Dr. Asiama stated.
Headline inflation dropped to 21.2% in April 2025, marking a cumulative 2.6 percentage-point decline since January. According to the Bank, this disinflation has been supported by exchange rate stability, reduced petroleum prices, and sustained monetary tightening. Core inflation measures and inflation expectations from consumers and businesses have also trended downward.
Despite this progress, Dr. Asiama emphasized 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.”
On the domestic front, economic activity continued to improve, with the Composite Index of Economic Activity rising by 2.3% year-on-year in March 2025, compared to 1.0% in the same period last year. The Ghana Purchasing Managers’ Index also exceeded the 50-point threshold, signaling optimism in output and new orders.
External sector performance was notably strong. A record current account surplus of US$2.1 billion was recorded in Q1 2025, primarily driven by higher gold and cocoa export earnings and robust remittance inflows. This translated into an overall Balance of Payments surplus of US$1.1 billion and a Gross International Reserves stock of US$10.7 billion, equivalent to 4.7 months of import cover.
The Ghana cedi has appreciated markedly, gaining 24.1% against the US dollar, 16.2% against the British pound, and 14.1% against the euro as of May 21, 2025. The central bank attributed this rebound to a combination of strong monetary policy, fiscal discipline, market confidence, and strict enforcement of foreign exchange rules.
Fiscal policy also remained largely on track. Although revenues in Q1 2025 underperformed targets, expenditure rationalisation efforts helped to maintain fiscal discipline. The stock of public debt stood at GH¢769.4 billion or 55.0% of GDP at the end of March, down from 61.8% of GDP in December 2024.
In a related move, the MPC introduced an amendment to the Cash Reserve Ratio (CRR) framework. Effective June 5, 2025, banks will be required to maintain reserves in the currency of the respective deposits — Ghana cedis for domestic currency deposits and foreign currency for foreign deposits.
The Governor underscored that these measures are essential to “further strengthen the ongoing recovery process and firm up macroeconomic stability.”
