Path ahead in restoring macroeconomic stability remains complex despite cedi’s performance - Governor

The Governor of the Bank of Ghana, Dr. Johnson Asiama, spoke about challenges ahead. He said restoring macroeconomic stability is complex and risky. These risks come from both global and domestic factors.

Dr. Asiama emphasized the importance of today's Monetary Policy Committee (MPC) meeting. Decisions made here will be crucial for the economy.

In his opening remarks, he noted inflation has moderated since the last MPC meeting. However, inflation remains above the medium-term target band of 8 ± 2%. It has exceeded the upper consultation band of 19%.

In March 2025, the MPC raised the policy rate by 100 basis points to 28%. This decision aimed to address rising inflation.

The Governor mentioned that early evidence shows this action helped reduce inflation momentum. The cedi appreciated nearly 19% between April and May 2025. This appreciation eased imported inflation pressures and restored public confidence.

Several factors contributed to this improvement: prudent monetary policy, better market sentiment, and gains in the external sector.

Dr. Asiama also highlighted positive signs in macroeconomic progress. Ghana reached a Staff-Level Agreement with the IMF on its Fourth Review of the ECF Programme. Although some prior actions are still pending, the outlook is positive.

Additionally, S&P upgraded Ghana’s sovereign rating from Selective Default to CCC+. External reserves have strengthened, trade balances improved, and consumer confidence is rising steadily.

Despite these advancements, significant challenges remain. The improving inflation outlook is still vulnerable to second-round effects and food supply constraints from northern Ghana and the Sahel region.

External price shocks are also a concern due to volatile global commodity markets. Geopolitical tensions and changing global trade dynamics add to market uncertainty as well. Recent US-led tariff disputes could impact commodity prices and financial flows in emerging markets like Ghana.