Cedi gains show policy working – BoG Governor

Governor of the Bank of Ghana (BoG), Johnson Pandit Asiama, says stabilising inflation and a stronger cedi show recent monetary policy decisions are delivering results.

Dr. Asiama told Parliament’s Committee on Economy and Development that the central bank’s tight monetary stance and liquidity management measures have begun producing clear improvements in key economic indicators.

He pointed to a sharp decline in inflation as evidence that the stabilisation strategy is working.

“Inflation has declined sharply,” the governor said, noting that headline inflation dropped from 23.8 percent in December 2024 to 5.4 percent by December 2025.

He added that the downward trend has continued into this year.

“Inflation fell further to 3.3 percent in February 2026, one of the lowest readings recorded in recent history,” Dr. Asiama stated.

According to the governor, the progress reflects deliberate policy choices aimed at restoring price stability and confidence in the economy.

“The objective was not only to reduce current inflation but also to restore credibility in the Bank’s commitment to price stability,” he said.

Dr. Asiama also highlighted developments in the foreign exchange market, saying the Ghanaian cedi has regained stability after a difficult period marked by sharp depreciation.

“The exchange rate has stabilised and recovered strongly,” he told lawmakers.

The governor explained that the cedi’s performance reflects improved macroeconomic fundamentals and renewed confidence in economic management.

He further noted that easing inflationary pressures has begun to influence borrowing costs across the financial system.

“Interest rates have begun to decline across the financial system as inflation expectations improved,” Dr. Asiama said.

He disclosed that the Monetary Policy Rate was reduced significantly during 2025 as conditions improved.

“The Monetary Policy Rate was reduced by 900 basis points during 2025, ending the year at 18 percent,” he added.

Dr. Asiama also pointed to improvements in Ghana’s external buffers, which he said have strengthened the country’s capacity to manage shocks.

“Gross international reserves increased to US$13.8 billion by the end of 2025, providing approximately 5.7 months of import cover,” he noted.

For many households and businesses, the governor said the changes are becoming visible in daily economic life.

“For ordinary Ghanaians, the real measure of success is simple: prices are stabilising, the cedi is steadier, and the economy is moving back toward normal,” he said.

Dr Asiama assured the committee that the central bank will continue pursuing a disciplined and data-driven approach to monetary policy to sustain the gains made so far.