The new measures are the introduction of a 273-day instrument to augment the existing sterilisation toolkit, intensification and monitoring of BoG Net Open Positions to ensure compliance and review the current structure of the Cash Reserve Ratio to assess its broad­er impact on liquidity conditions and financial intermediation in the economy.

Speaking at a news conference after the 123rd regular meeting of the Monetary Policy Commit­tee (MPC), the Governor of the BoG, Dr Johnson Pandit Asiama, explained that the new measures had become necessary to rein in inflation, which remained unac­ceptably high.

He noted that the country’s inflation rate stood at 23.1 per cent, significantly higher than the 17 per cent target set under the International Monetary Fund (IMF) programme.
    

Dr Asiama stressed that it was essential to pursue effective mea­sures to bring inflation under con­trol, particularly since the current inflation rate indicated a deviation from the disinflation path.

At the news conference on Friday, the MPC decided to raise the policy rate, the rate at which the BoG lends to commercial banks, by 100 basis points from 27 per cent to 28 per cent.

Dr Asiama also clarified that the increase in the policy rate was not influenced by pressure from the IMF, dismissing suggestions to that effect.

He explained that the deci­sion stemmed from the need to manage the liquidity injected into the economy last year to prevent a second wave of inflationary pressures.

The Governor pointed out that while headline inflation had declined marginally, it remained a concern.

Both food and non-food inflation were significantly higher than expected, with core inflation remaining elevated.

He attributed food inflation largely to supply-side factors and stressed the importance of preventing second-round effects from such increases.

Furthermore, Dr Asiama said the persistent inflationary dynamics over the past year, partly driven by both fiscal and monetary policy missteps, would require a policy reset to re-anchor the disinflation process.

The Governor observed that the fiscal stance in 2024 had been expansionary, creating significant fiscal impulses and a liquidity overhang that needed to be care­fully managed.

He again cautioned that the strong liquidity conditions could spill over into other segments of the economy and undermine the disinflation process.

While the government had signalled a strong commitment to fiscal consolidation, Dr Asiama maintained that monetary policy restraint was also necessary to stabilise prices.

Turning to the global econom­ic environment, Dr Asiama stated that it had become more challeng­ing due to increasing trade and economic policy uncertainty.

The Chairman of MPC men­tioned that the series of tariffs announced by the United States administration could have nega­tive repercussions on the global economy.

Moreover, he also noted that the disinflation process appeared to have stalled in some coun­tries, while financial conditions remained broadly restrictive as central banks slowed the pace of monetary policy easing.

Dr Asiama observed that the persistence of those exter­nal headwinds could spill over into Ghana’s domestic econo­my through trade and financial channels, underscoring the need for proactive policy measures to safeguard the country’s economic stability.