BoG Raises Policy Rate to 28% to Strengthen Inflation Control

Bank of Ghana increases Policy Rate to 28% to Reinforce Inflation Control.

The Bank of Ghana (BoG) has increased its Monetary Policy Rate by 100 basis points, moving it from 27% to 28%.

Governor Dr. Johnson Asiama stated that this adjustment is part of the central bank’s efforts to sustain the inflation reduction process and maintain economic stability.

He noted that the global economy is facing heightened uncertainty, driven by evolving trade policies and economic shifts.

“The recent tariffs imposed by the U.S. administration continue to unfold and may negatively impact the global economy. 

These developments have already led to downward revisions in GDP growth forecasts for the U.S. and China, which could, in turn, affect global growth.

“Additionally, in some economies, the decline in inflation appears to have slowed, while financial conditions remain tight as central banks adopt a cautious approach to policy easing,” Dr. Asiama explained.

He emphasized the importance of proactive policy decisions, as external economic pressures could affect Ghana’s economy.

“These persistent external challenges could spill over into the domestic economy through trade and financial channels, making it essential to keep monetary policy forward-looking,” he added.

The BoG indicated that once inflation becomes firmly anchored, its Monetary Policy Committee will assess the potential for a gradual easing of its stance.

Beyond the interest rate hike, the central bank is implementing additional measures to enhance liquidity management and improve monetary policy effectiveness.

These include:

•Introducing a 273-day financial instrument to support existing liquidity management tools.

•Strengthening oversight of banks’ Net Open Positions (NOPs) to ensure regulatory compliance.

•Reviewing the structure of the Cash Reserve Ratio (CRR) to assess its broader impact on liquidity and financial intermediation.

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