The Governor of the Bank of Ghana, Dr. Johnson Asiama, has announced that the country’s economy is showing promising signs of recovery, bolstered by strong policy interventions and improving macroeconomic indicators.

Speaking at the opening session of the 124th Monetary Policy Committee (MPC) meeting in Accra on Wednesday, May 21, 2025, Dr. Asiama acknowledged the early signs of stabilisation in Ghana’s economic landscape, while also cautioning that the road ahead remains uncertain.

“We convene at a time when Ghana’s macroeconomic conditions are exhibiting early signs of stabilization, supported by recent policy actions and improving external and domestic fundamentals. However, the path ahead remains complex and fraught with risks, both global and domestic.” ” he said.

Inflation and Currency Developments

Dr. Asiama highlighted key economic developments, including a continued decline in inflation and a notable appreciation of the Ghana cedi. Inflation fell to 21.2% in April 2025, a significant drop from earlier levels, although still above the central bank’s medium-term target of 8 ± 2%.

He attributed the easing inflation to decisive monetary action, particularly the MPC’s move in March to raise the policy rate by 100 basis points to 28%.

“Preliminary evidence suggests this action has contributed to dampening inflation momentum,” Dr. Asiama noted.

Additionally, the cedi appreciated by nearly 19% between April and May—an outcome the Governor linked to improved market sentiment, effective monetary policy, and stronger external sector performance.

“This appreciation has helped ease imported inflation pressures and restore public confidence in the economy,” he added.

IMF Programme and Credit Rating Upgrade

The Governor also referenced Ghana’s progress under the IMF’s Extended Credit Facility (ECF) programme, revealing that a Staff-Level Agreement had been reached on the Fourth Review, indicating a positive outlook.
He also pointed to the recent S&P credit rating upgrade from Selective Default to CCC+ as further proof of renewed investor confidence.

Remaining Challenges and Policy Adjustments

Despite these gains, Dr. Asiama warned of persistent risks, particularly from global commodity price shocks, food supply constraints, and geopolitical tensions such as ongoing tariff disputes involving major global economies.

In response, the Bank of Ghana is updating its monetary policy framework. It plans to rely less on unremunerated Cash Reserve Ratios and more on active Open Market Operations with longer-term instruments to enhance policy transmission and liquidity control.

“This shift will support more effective monetary policy, better liquidity management, and create room for increased private sector credit,” he said.

Looking Ahead: Key Questions and Considerations

As the MPC begins deliberations, Dr. Asiama urged members to consider several critical questions:

Is the current appreciation of the cedi sustainable?

How durable is the observed return of market confidence?

What do these dynamics mean for the medium-term inflation outlook?

“Our credibility depends on our ability to respond decisively and proportionately to evolving economic realities,” he concluded, calling for rigorous and professional analysis during the meeting.

Policy Decision Expected May 23

The MPC’s decision on the benchmark policy rate—currently at 28%—will be closely watched. Analysts expect the rate to be held steady, with any cuts dependent on further disinflation and economic stability.

The Committee’s decision, to be announced at a press briefing on Friday, May 23, 2025, will have wide-ranging implications for interest rates, investor sentiment, and the broader economy.