Maintain a tight monetary policy stance – IMF to BoG

The International Monetary Fund (IMF) has advised the Bank of Ghana (BoG) to maintain a tight monetary policy to mitigate inflation risks while advancing key reforms. This recommendation follows Ghana's third review under the Economic Credit Facility program.

The IMF highlighted the need for robust liquidity absorption to address inflationary pressures caused by the cedi's depreciation and dry spells, ensuring inflation expectations remain anchored.

Key priorities include rebuilding international reserves and refining BoG's foreign exchange intervention framework. The IMF commended progress in reserves accumulation but emphasized careful risk management and limiting foreign exchange interventions to strengthen external buffers.

The IMF also urged decisive measures to bolster the financial sector, calling for intensified monitoring, timely bank recapitalization, and the phasing out of regulatory forbearances to address high non-performing loans and enhance risk management.