Editorial: Central Bank outlines additional liquidity measures

The central bank has introduced a new 273-day instrument. This aims to improve sterilization efforts. It will enhance liquidity absorption and monetary control.

The bank will also monitor banks’ Net Open Positions more closely. This is expected to improve discipline in the foreign exchange market. It should reduce speculative pressures and ensure regulatory compliance.

Additionally, the central bank will review the current structure of the Cash Reserve Ratio (CRR). This review will assess its effectiveness in managing liquidity and credit expansion.

Inflation was at 23.1 percent in February 2025. This is a slight decrease from 23.8 percent in December 2024. However, the Monetary Policy Committee (MPC) remains cautious about ongoing risks.

The central bank emphasized that monetary policy must stay tight. This is necessary to anchor inflation expectations and support stability. The Governor stated that future decisions will depend on inflation trends, global economics, and fiscal developments.

Market reactions to these policy changes have been mixed. Some investors see the interest rate hike as essential for controlling inflation. Others worry about its impact on borrowing costs and economic growth.

The private sector has experienced a recovery in credit growth recently. However, higher interest rates may create new financing challenges for businesses. The Bank of Ghana's latest measures come amid tight global financial conditions.