The Bank of Ghana has announced plans to enhance essential reforms aimed at solidifying the recent progress achieved by the cedi, which has risen in value by nearly 19 percent since the beginning of the year.
The surge in the local currency is primarily attributed to coordinated fiscal discipline and stringent monetary policy measures.
Dr. Johnson Asiamah, the Governor of the Bank of Ghana, indicated that the forthcoming phase of reforms will concentrate on maintaining foreign exchange inflows and strengthening regulatory oversight within the foreign exchange market.
He made these remarks during the commencement of the Bank’s 124th Monetary Policy Committee meeting on Wednesday at the Bank Square.
‘Notably, the cedi has experienced a significant appreciation of nearly 19 percent from April to May, which has contributed to alleviating imported inflation pressures and restoring public confidence. This appreciation is a result of various factors, including prudent monetary policy, enhanced market sentiment, and improvements in the external sector,’ he stated.
However, the Governor promptly noted that fundamental economic challenges continue to exist despite the positive outlook. ‘Nevertheless, considerable challenges remain.
The inflation outlook, although improving, is still susceptible to second-round effects, food supply issues, particularly from northern Ghana and the Sahel, as well as external price shocks, especially in light of the volatile global commodity markets.’
Geopolitical tensions and shifting global trade dynamics, particularly the recent tariff disputes led by the United States, have increased market uncertainty and may influence commodity prices, exchange rates, and financial flows in emerging markets such as ours,” he stated.
The Monetary Policy Committee (MPC) convenes during a period of persistent strength of the cedi against the US dollar, alongside ongoing initiatives to control inflation.
In its previous meeting in March, the Committee elevated the policy rate by 100 basis points to 28%, a decision that Governor Dr. Johnson Asiama indicated was essential to stabilize inflation expectations.
However, with indications of currency stability and a reduction in global pressures, the market appears to be leaning towards maintaining the policy rate to support lending rates and facilitate overall economic recovery. The meeting is scheduled to conclude on Friday, May 23, 2025, with a press conference to disclose the new policy direction.
