Scheduled Exit from IMF Programme Could Influence Capital Flows– BoG

By Praisebell Rosemond Larbi

The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiamah, has cautioned that Ghana’s scheduled exit from the International Monetary Fund (IMF) programme later this year, combined with lingering uncertainties in the global economic environment, could pose fresh challenges for capital flows and exchange rate stability.

According to the Governor, while Ghana has made notable macroeconomic gains under the IMF-supported programme, the transition to a post-programme environment requires heightened vigilance to preserve investor confidence and sustain recent stability in the foreign exchange market.

Responding to questions from the media, Dr. Asiamah said the Central Bank remains alert to the risks that could emerge as Ghana moves beyond the IMF arrangement, particularly in relation to portfolio flows, external financing conditions, and currency dynamics.

“As the Bank continues with its policy vigilance during the easing cycle and reserve build-up, we expect to maintain the earlier gains. However, we note that the scheduled exit from the IMF programme later this year, together with uncertainties in the global environment, could influence capital flows and exchange rate dynamics,” he stated.

He explained that IMF programmes often provide an important credibility anchor for emerging and frontier economies, helping to reassure investors about policy discipline, fiscal consolidation, and macroeconomic stability. The conclusion of such a programme, while a positive milestone, can also trigger a reassessment of risk by foreign investors, particularly in an environment of volatile global financial conditions.

“Against this backdrop, the Bank’s policy strategy emphasises caution and vigilance,” the Governor added, underscoring the need for proactive monitoring of both domestic and external developments.

Dr. Asiamah noted that global uncertainties, including geopolitical tensions, shifting monetary policy expectations in advanced economies, commodity price volatility, and changing risk sentiment, could interact with domestic factors to affect capital inflows, external reserves, and exchange rate behaviour.

He stressed that the Bank of Ghana would continue to closely monitor developments in global financial markets, investor positioning, and domestic liquidity conditions, while deploying appropriate policy tools to mitigate excessive volatility.

On inflation, the Governor highlighted Ghana’s remarkable disinflation over the past year, describing it as a major achievement of the tight monetary stance and improved fiscal coordination under the IMF programme. Headline inflation declined sharply and sustainably from 23.8% in December 2024 to 5.4% in December 2025, marking a return to single-digit inflation after several years of elevated price pressures.

According to Dr. Asiamah, this improvement reflects a combination of factors, including restrictive monetary conditions, strengthened fiscal discipline, easing food supply pressures, and well-anchored inflation expectations.

With inflation now firmly below the lower bound of the medium-term target band, the Governor said real policy rates remain highly restrictive, providing room for further monetary policy easing without undermining price stability.

“With headline inflation now well below the lower bound of the medium-term target, real policy rates remain highly restrictive. This provides space for additional rate cuts while still maintaining a sufficiently tight policy stance to safeguard price stability,” he explained.

However, he cautioned that any further easing would be carefully calibrated and data-dependent, taking into account developments in inflation expectations, exchange rate movements, and capital flows, particularly as Ghana approaches the end of the IMF programme.

Dr. Asiamah emphasised that preserving macroeconomic stability in the post-IMF period would require continued policy coordination, prudent fiscal management, and sustained efforts to build external buffers.

He reiterated the Central Bank’s commitment to safeguarding price stability, supporting orderly foreign exchange market conditions, and maintaining confidence in the cedi, even as Ghana navigates the transition to a post-programme environment.

The Governor concluded that while Ghana’s macroeconomic fundamentals have strengthened significantly, the period ahead demands discipline and vigilance to ensure that recent gains are not reversed and that the economy remains resilient to both domestic and external shocks.