Editorial: MPC meets on economic outlook
Dr. Johnson Asiama, Bank of Ghana Governor, has assured that the cedi’s recent good performance is sustainable and based on current monetary policy measures taken by the central bank to check inflation and continue strengthening the cedi.
This assurance was given at the Monetary Policy Committee (MPC) meeting’s opening at the Bank of Ghana yesterday, May, 21.
He attributed the cedi’s appreciation to a combination of factors including prudent monetary policy, improved market sentiment and external sector gains.
The Governor also touched on how the country’s external reserves have strengthened, including the trade balance which has improved as consumer and business confidence indices rise.
Despite the above, he however noted that though significant progress has been made challenges remain. For instance, the inflation outlook is still a concern as it remains vulnerable.
To tackle these challenges, Dr. Asiama urged the Committee to carefully assess whether the current monetary policy stance remains adequate to drive disinflation without undermining the fragile growth momentum.
At its last meeting, the MPC increased its monetary policy rate by 100 basis points to 28 percent. Some market watchers expect BoG to maintain the policy rate at 28% – with any potential cuts dependent on continued disinflation.
With the disinflation path still fragile, BoG delivered a 100-basis point policy rate hike in March – its first increase in several months – bringing the benchmark rate to 28 percent.
Dr. Asiama assured that the Bank of Ghana has commenced a comprehensive review of its monetary policy implementation framework to mitigate the impact of challenges outlined.
The Bank of Ghana’s (BoG) Monetary Policy Committee’s (MPC) 124th meeting is to review macroeconomic developments in the country.
The Committee is expected to deliberate on measures for maintaining the gains while working to reduce inflation, which slowed marginally to 21.2 percent in April.
Some economists have raised concerns about the cedi’s aggressive rally in a short period, cautioning that it could hurt the economy in the long run.
Dr. Asiama also touched on how the country’s external reserves have strengthened. The meeting is coming at a time when the cedi has witnessed one of its best performances in recent years, appreciating by 17.17% since January 1, 2025 against the US dollar.
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