Stay course on policy stance to sustain inflation gains – IMF to BoG

The International Monetary Fund (IMF) has urged the Bank of Ghana (BoG) to stay the course on its monetary policy stance despite recent interest rate cuts, stressing that continued vigilance is crucial to keeping inflation expectations anchored within single digits.

Cumulatively, the central bank has lowered its policy rate by 650 basis points in 2025.

The last meeting in September 2025 saw a record 350-basis-point slash, bringing the rate to 21.5 percent, following a 300-basis-point cut in July from 28 percent to 25 percent.

Ghana’s inflation has dropped sharply from about 24 percent in 2024 to 9.4 percent in September 2025, while the economy expanded by 6.3 percent year-on-year in the second quarter of 2025.

These gains, supported by fiscal restraint, exchange rate stability, and firm monetary decisions, have strengthened Ghana’s recovery.

However, the IMF warns that easing too quickly could erode the progress made so far.

Speaking on Channel One TV’s Point of View with Bernard Avle, IMF Resident Representative to Ghana, Dr. Adrian Alter, praised the BoG’s efforts but cautioned that maintaining policy discipline remains essential.

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

“So 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, what you need to take into account is also real interest rates,” he added.

He explained that real interest rates remain above historical averages and should be managed carefully to preserve 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 monetary policy band,” he explained.

Dr. Alter highlighted that sustaining a cautious policy stance, alongside fiscal discipline, would consolidate Ghana’s disinflation progress and bolster investor confidence.

Source: Citi Business News