The Bank of Ghana says it will intensify key reforms to consolidate recent gains made by the cedi which has appreciated by nearly 19 percent year-to-date.
The rally of the local currency has been largely driven by coordinated fiscal discipline and tight monetary policy measures.
Governor of the Bank of Ghana, Dr. Johnson Asiamah believes the next phase of reforms will focus on sustaining foreign exchange inflows and tightening regulatory oversight in the forex market.
He was speaking at the opening of the Bank’s 124th Monetary Policy Committee meeting on Wednesday at the Bank Square.
“Importantly, the cedi has appreciated sharply by nearly 19 percent between April and May, helping to ease imported inflation pressures and restore public confidence. The appreciation reflects a combination of factors, including prudent monetary policy, improved market sentiment and external sector gains, he said.
But the Governor quickly added that underlying economic challenges persist despite the improving outlook.
“However, significant challenges persist. The inflation outlook, while improving, remains vulnerable to second-round effects, food supply constraints, especially from northern Ghana and the Sahel and external price shocks, particularly given 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.
The MPC is being held at a time of sustained cedi strength against the US dollar and ongoing efforts to rein in inflation.
At its last meeting in March, the Committee raised the policy rate by 100 basis points to 28%, a move the Governor Dr. Johnson Asiama said was necessary to anchor inflation expectations.
But with signs of currency stability and easing global pressures, the market is tilting towards a policy rate retention to guide lending rates and overall economic recovery.
The meeting will end this Friday, May 23, 2025 with a press briefing, to announce the new policy stance.
