The International Monetary Fund (IMF) has advised the Bank of Ghana (BoG) to maintain a cautious monetary policy stance despite recent reductions in the policy rate, warning that premature easing could undermine progress in stabilising prices and anchoring inflation expectations.

So far in 2025, the central bank has reduced its policy rate by a cumulative 650 basis points, reflecting growing confidence in the country’s disinflation momentum. The most recent decision in September 2025 saw a record 350-basis-point cut, lowering the rate to 21.5 percent, following a 300-basis-point reduction in July from 28 percent to 25 percent.

These policy adjustments come amid strong macroeconomic gains. Ghana’s inflation has fallen sharply from about 24 percent in 2024 to 9.4 percent in September 2025, marking the first single-digit inflation in four years. Meanwhile, the economy expanded by 6.3 percent year-on-year in the second quarter of 2025, supported by fiscal restraint, exchange rate stability, and prudent monetary management.

However, the IMF cautioned that easing too quickly could reverse these hard-won gains.

Speaking on Channel One TV’s Point of View with Bernard Avle, IMF Resident Representative to Ghana, Dr. Adrian Alter, commended the BoG’s policy management but urged continued vigilance to keep inflation expectations firmly anchored.

“The BoG has kept its monetary policy consistently tight and managed to reduce inflationary pressures through these prudent policies,” Dr. Alter said.

He noted that although recent rate cuts were justified by improving economic conditions, maintaining balance is essential.

“The fact that the BoG decided to cut rates from a very high level—28 percent, I think, in March—to the current level of 21.5 percent, what you need to take into account is also real interest rates,” he explained.

Dr. Alter added that real interest rates remain above historical averages and should continue to be managed carefully to preserve macroeconomic stability.

“What the IMF team advised the BoG is to keep a prudent monetary policy in order for inflation expectations to re-anchor at single digits. You need to keep monetary policy tighter than usual to have these expectations re-anchor within the policy band,” he said.

He emphasised that sustaining a disciplined and cautious policy stance, in tandem with ongoing fiscal consolidation, would be key to consolidating Ghana’s disinflation success and strengthening investor confidence in the broader economy.