Ghana: Macroeconomic Stability Came At High Cost – – BoG Governor

The Governor of the Bank of Ghana (BoG) has said the strong macroeconomic stability achieved last year came at a high cost to the central bank.

Dr Johnson Pandit Asiama, who made this known at the Kwahu Business Forum Governor’s Roundtable on Sunday, noted that although Ghana recorded significant gains in inflation reduction and exchange rate stability in 2025, achieving these outcomes required substantial financial intervention by the central bank.

He explained that the BoG had to undertake aggressive monetary operations to mop up excess liquidity from the system, a move that significantly increased operational costs.

“The work we do is always about trade-offs, trying to strike the right balance between inflation control and economic growth,” Dr Asiama stated.

According to him, inflation declined sharply from 23.8 per cent in December 2024 to 5.4 per cent by December 2025, describing the achievement as remarkable but costly.

He indicated that the reduction was largely driven by tight monetary policy measures, including open market operations and the issuance of BoG bills to absorb excess cash in circulation.

Dr Asiama stressed that while such measures were necessary to stabilise prices and protect the purchasing power of citizens, they came at the expense of the central bank’s balance sheet.

“Last year was good but expensive for the central bank. It took us a lot of money to bring inflation down, but we had to act because rising inflation erodes real incomes,” he said.

Touching on exchange rate performance, the Governor assured the business community that the cedi remained stable and under control, contributing to improved investor confidence and macroeconomic stability.

He noted that central banks across the world faced similar challenges, citing the delicate balance required in managing inflation, liquidity, and growth.

Dr Asiama, however, expressed optimism about the outlook for 2026, indicating that maintaining low inflation levels would not require the same level of financial resources as in the previous year.

“If you look at where inflation was at the end of 2024 and where it is now, it will not involve the same level of resources to keep it low and stable going forward,” he said.

He further explained that with inflation currently trending below four per cent, the intensity of monetary tightening measures would likely ease, thereby reducing operational costs.

Dr Asiama also underscored the importance of a strong financial sector in supporting economic growth, noting that well-capitalised banks were better positioned to extend credit to businesses.

“When banks are strong, they can lend more to support economic activity, and that is what we are working towards,” he added.

He called for continued collaboration between the central bank and the business community to sustain the gains made in macroeconomic stability.

Dr Asiama reaffirmed the commitment of the Bank of Ghana to maintaining price stability, stressing that despite the high cost involved, the fight against inflation remained essential to safeguarding the livelihoods of Ghanaians.

He said the experience of 2025 demonstrated the difficult but necessary policy choices central banks must make, expressing confidence that the economy was on a more stable and sustainable path in 2026.

By Ghanaian Times.