The Bank of Ghana has expressed its commitment to maintain a sufficiently tight monetary policy stance until inflation is on a firmly declining path.

In a statement to the International Monetary Fund, the Central Bank said it monetary policy aims to bring inflation back to the Bank of Ghana’s medium term objective of 8 ±2 percent.

“Our policy decisions will continue to be data-dependent to ensure a fast-paced and orderly disinflation path towards the inflation target; the BoG stands ready to adjust the policy stance to ensure inflation evolves as envisaged under our monetary policy consultation clause (TMU Section II)”.

“We are committed to continue absorbing excess liquidity and making sure our policy rate is fully transmitted to the market. In doing so, we will review the increased reliance on reserve requirements and the new tiering framework to ensure they deliver on their objectives”, it further explained.

The Central Bank said it is seeking to enhance its inflation targeting framework through improvements in its Forecast and Policy Analysis System (FPAS), macroeconomic data collection including BoG inflation expectations survey, analytical capacity, and central-bank monetary policy communication. 

It will rebuild official international reserves to at least three months of import cover by the end of the program.

“As the difficulties affecting the cocoa sector hamper its ability to accumulate reserves and that payments to IPPs [Independent Power Producers] are larger than previously expected, coupled with the uncertainty about the timing of the debt restructuring, we are also requesting a modification of the QPC to add an asymmetric adjustor on debt service on instruments arising from the restructuring of bondholders’ and commercial creditor’s claims”.

Given this reserve accumulation target and the headwinds, it will adhere to a gross foreign exchange intervention budget.

The Monetary Policy Commitee of the Bank of Ghana kept the policy rate unchanged at 29.0% for the thrid time running in July 2024.