Any Further Policy Rate Easing Should Be Gradual and Data Dependent – IMF to BoG

By ZED Newsroom
The International Monetary Fund (IMF) has advised the Bank of Ghana (BoG) to ensure that any further easing of the monetary policy rate remains gradual and firmly guided by incoming economic data.
The Fund gave the advice in its latest Staff Review of Ghana’s IMF-supported program, noting that while recent conditions justify a cautious easing stance, monetary policy decisions must continue to prioritise inflation and macroeconomic stability.
“With inflation pressures subsiding and the recent appreciation of the cedi, the Bank of Ghana (BoG) has appropriately begun a cautious monetary easing cycle. Any further easing should remain gradual and data dependent,” the IMF said.
Since January 2025, the Bank of Ghana has reduced the policy rate by a cumulative 9.0 percentage points, bringing it down to 18.0%. The cuts reflect easing inflationary pressures and improved foreign exchange market conditions, supported by stronger macroeconomic fundamentals.
The IMF also acknowledged progress made by the central bank in strengthening the foreign exchange market. In collaboration with the Fund, the BoG has developed and implemented a new structured foreign exchange operations framework aimed at better intermediating FX flows, smoothing excessive market volatility and supporting the accumulation of international reserves.
Beyond monetary policy, the IMF commended the Ghanaian authorities for taking decisive steps to safeguard financial sector stability. According to the Fund, measures have been implemented to restructure and reform state-owned banks, address gaps in the crisis management and resolution framework, and adopt a multi-pronged strategy to reduce non-performing loans within the banking system.
The Bretton Woods institution further noted that important progress has been made in strengthening governance and improving public sector efficiency, in line with the recently published Governance Diagnostic Assessment report.
However, it stressed that efforts to improve transparency and oversight must continue, particularly in relation to public disclosure requirements and the management of State-Owned Enterprises in key sectors such as gold, cocoa and energy.
The IMF underscored the importance of ambitious structural reforms to create a more enabling environment for private sector investment. It said enhanced governance, transparency and policy consistency remain critical to boosting Ghana’s growth potential and underpinning sustainable job creation.
According to the Fund, maintaining macroeconomic discipline, pursuing gradual and data-driven monetary easing, and advancing structural reforms will be essential to consolidating recent gains and sustaining Ghana’s economic recovery over the medium term.

Photo Credit: Bloomberg.