The International Monetary Fund (IMF) has called on the Bank of Ghana (BoG) to maintain a tight monetary policy stance to address inflation risks while advancing key reforms to strengthen financial safeguards and central bank efficiency.
The IMF emphasised that tight monetary policy, supported by effective liquidity management, is essential to prevent inflationary pressures driven by the recent cedi depreciation and dry weather conditions from destabilising expectations.
The goal is to guide inflation back within the BoG’s target range.
In its country report following the third review of Ghana’s Economic Credit Facility programme, the IMF stressed the need for sustained progress in implementing its safeguard recommendations.
These measures aim to bolster the BoG’s independence and operational effectiveness.
The IMF also highlighted key priorities under the programme, including rebuilding international reserves and reforming BoG’s foreign exchange (FX) intervention framework.
While the overperformance in reserve accumulation, largely due to the gold-for-reserves programme, was acknowledged, the IMF cautioned against potential portfolio risks and liquidity challenges.
It was recommended that FX interventions be limited to strengthen external buffers further.
The BoG was commended for adopting a more robust FX reference rate computation method to reduce multiple currency practices (MCPs).
However, the IMF urged further steps, such as implementing a formal FX intervention policy and transitioning to transparent auction-based systems, to improve the FX market’s efficiency.
In the financial sector, the IMF called for decisive efforts to enhance stability.
It noted that the BoG has intensified monitoring and encouraged timely recapitalization of banks, but underscored the need for progress in phasing out regulatory forbearance.
With high levels of non-performing loans (NPLs), the IMF urged the adoption of strong supervisory strategies to improve credit and risk management.
The IMF’s recommendations aim to reinforce Ghana’s monetary policy framework, enhance financial stability, and support sustainable economic growth.