The International Monetary Fund (IMF) has urged the Bank of Ghana (BoG) to maintain a strict monetary policy stance to counter risks of rising inflation. The Fund emphasized the importance of robust liquidity management measures to prevent inflationary pressures—caused by recent cedi depreciation and adverse weather conditions—from undermining inflation expectations. This approach is expected to guide inflation back within the BoG’s target range.

Strengthening Central Bank Independence and Efficiency

In its assessment following the third review of Ghana’s Economic Credit Facility programme, the IMF stressed the need for the BoG to address safeguard recommendations. These measures are crucial for enhancing the central bank’s independence and operational effectiveness.

Rebuilding International Reserves

Rebuilding Ghana’s international reserves remains a top priority under the programme. The IMF acknowledged the BoG’s progress in exceeding reserve accumulation targets, driven largely by the expansion of the gold-for-reserves initiative. However, it cautioned that this programme requires careful management to mitigate potential portfolio risks and liquidity concerns.

The Fund also highlighted the importance of limiting foreign exchange (FX) interventions to strengthen Ghana’s external reserves. It welcomed improvements in the FX reference rate computation method, which aim to reduce the occurrence of multiple currency practices (MCPs). Furthermore

Source: TheDotNews