Bank of Ghana Governor Assures Cedi’s Favourable Outlook
Story By: Akua Oteng Amponsah
The Governor of the Bank of Ghana, Dr. Johnson Asiama, has assured that the cedi’s outlook remains favourable, citing current monetary policy measures aimed at controlling inflation and strengthening the currency.
Speaking at the opening of the Monetary Policy Committee (MPC) meeting, Dr. Asiama encouraged investors and Ghanaians to remain confident in the cedi’s stability, attributing its recent performance to prudent monetary policy, improved market sentiment, and external sector gains.
The Governor highlighted several factors contributing to the cedi’s appreciation, including a Staff-Level Agreement with the IMF on the Fourth Review of the Extended Credit Facility (ECF) Programme and a recent upgrade of Ghana’s sovereign rating by S&P from Selective Default to CCC+.
He also noted improvements in the country’s external reserves, trade balance, and rising consumer and business confidence indices.
However, Dr. Asiama cautioned that challenges persist, including vulnerability to second-round effects on inflation and food supply constraints. He also warned of potential impacts from global trade dynamics, such as US-led tariff disputes, on commodity prices, exchange rates, and financial flows in emerging markets like Ghana.
In response, the Bank of Ghana has initiated a comprehensive review of its monetary policy implementation framework. Dr. Asiama announced a shift from reliance on the unremunerated Cash Reserve Ratio to a more active Open Market Operations regime, aiming to enhance policy transmission, improve liquidity management, and facilitate credit expansion to the private sector.
The MPC has been tasked with assessing the adequacy of the current monetary policy stance in driving disinflation while supporting growth momentum.
Key considerations include the sustainability of exchange rate appreciation, the durability of market confidence, and implications for inflation forecasts over the medium term.
