IMF Urges BoG to Maintain Cautious Monetary Stance Despite Rate Cuts
The International Monetary Fund (IMF) has advised the Bank of Ghana (BoG) to maintain its cautious monetary policy stance despite recent rate cuts, emphasising that continued vigilance is necessary to keep inflation expectations anchored within the single-digit range.
The central bank has cumulatively reduced its policy rate by 650 basis points so far in 2025, following a 350-basis-point cut in September that brought the benchmark rate down to 21.5 percent, after a 300-basis-point reduction in July from 28 percent to 25 percent.
Ghana’s inflation rate has since dropped sharply from around 24 percent in 2024 to 9.4 percent in September 2025, while the economy posted a robust 6.3 percent year-on-year expansion in the second quarter of the year.
These gains, supported by fiscal discipline, exchange rate stability, and prudent monetary management, have strengthened the country’s economic recovery. However, the IMF cautions that an overly aggressive monetary easing could undermine the progress achieved thus far.
Speaking on Channel One TV’s Point of View programme with Bernard Avle, IMF Resident Representative to Ghana, Dr Adrian Alter, commended the BoG’s policy management but urged the central bank to remain disciplined in its approach.
“The BoG has kept its monetary policy consistently tight and basically managed to reduce the inflationary pressures through these prudent policies,” Dr Alter stated.
“So the fact that the BoG decided to cut rates from a very high level — 28 percent, I think, in March — to the current level of 21.5, what you need to take into account is also real interest rates,” he noted.
He explained that while the nominal policy rate has been lowered, real interest rates remain above historical averages and should be managed carefully to sustain macroeconomic stability.
“What the IMF team advised the BoG is to keep a prudent monetary policy in order for inflation expectations to re-anchor at single digits. You need to keep monetary policy tighter than usual to have these expectations re-anchor within the monetary policy band,” he explained.
Dr Alter underscored that sustaining a cautious monetary stance, complemented by continued fiscal discipline, would help consolidate Ghana’s disinflation gains and reinforce investor confidence in the economy.
