The International Monetary Fund (IMF) has urged the Bank of Ghana (BoG) to maintain a stringent monetary policy stance to mitigate inflationary risks and safeguard the economy. This recommendation is part of the IMF’s country assessment following the third review of Ghana’s Economic Credit Facility programme. The IMF emphasized that robust liquidity management is crucial in addressing inflationary pressures caused by a prolonged dry spell and the recent depreciation of the cedi. These measures aim to prevent inflation expectations from spiraling out of control while gradually steering inflation back within the BoG's target range. The Fund further called on the BoG to continue implementing its safeguard assessment recommendations to enhance the central bank’s independence and operational efficiency.
A significant focus of the IMF's recommendations is rebuilding Ghana's international reserves and reforming the foreign exchange intervention framework. While progress has been made in reserve accumulation, largely due to the expansion of the “gold for reserves” programme, the IMF stressed the need for careful management to minimize associated portfolio risks and liquidity challenges. The BoG has already made strides in adopting a more robust FX reference rate computation method to curb multiple currency practices. Additionally, the move towards a transparent auction-based system for foreign exchange interventions is expected to improve market functionality and rebuild external buffers. These reforms are integral to stabilizing the currency and strengthening Ghana's foreign exchange market.
Strengthening the financial sector remains another key priority under the IMF’s recommendations. The Fund acknowledged the BoG's intensified monitoring efforts and measures to promote timely bank recapitalization. However, it pointed out the need for further progress in phasing out regulatory forbearances and addressing the high levels of non-performing loans (NPLs). To ensure the financial sector’s resilience, the IMF urged the implementation of robust supervisory strategies to enhance credit and risk management. These actions, combined with efforts to rebuild reserves and reform the FX market, are critical to achieving long-term financial stability and supporting Ghana’s broader economic recovery goals.
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