At the start of the 124th Monetary Policy Committee (MPC) meeting on May 21, 2025, Dr. Johnson Asiama, Governor of the Bank of Ghana (BoG), reaffirmed the central bank’s commitment to bolstering the impressive 19% year-to-date appreciation of the cedi. This achievement, driven by fiscal discipline and tight monetary policy, has boosted market confidence and mitigated inflationary pressures.
Dr. Asiama underscored the significance of this milestone, stating, “The cedi’s near 19 per cent appreciation between April and May is a testament to the robust monetary policies and improved market sentiment we have cultivated. This momentum has been crucial in alleviating imported inflation and restoring confidence in the local currency.”
The BoG plans to implement further reforms to sustain this progress. According to Dr. Asiama, upcoming measures will prioritize maintaining foreign exchange inflows and enhancing regulatory oversight in the forex market. These steps aim to consolidate the cedi’s strength and secure its gains against external vulnerabilities.
Challenges Amid Optimism
While celebrating the cedi’s performance, the governor acknowledged persistent economic hurdles. Inflation risks remain a critical concern, exacerbated by potential second-round effects, food supply constraints, and volatile global commodity prices. Dr. Asiama emphasized the fragile nature of the current outlook, highlighting ongoing geopolitical tensions and global trade disruptions, such as recent U.S.-led tariff disputes, which could ripple through emerging markets like Ghana.
“The external environment remains uncertain,” he noted. “Global trade dynamics, commodity price fluctuations, and geopolitical developments continue to pose risks to our economic stability.”
A Crucial Policy Moment
The current MPC meeting comes at a pivotal juncture, with the cedi displaying sustained resilience and inflationary pressures showing early signs of moderation. At its last meeting in March, the BoG raised the policy rate by 100 basis points to 28% to anchor inflation expectations.
Now, with improved currency stability and easing external pressures, market speculation leans towards maintaining the policy rate to support lending and economic recovery.
The meeting, scheduled to conclude on May 23, 2025, will culminate in a press briefing where the central bank will announce its latest policy stance. Stakeholders eagerly anticipate the outcomes, which are expected to shape Ghana’s monetary and economic trajectory in the months ahead.
Story by: Mercy Addai Turkson #ahotoronline.com
