The Bank of Ghana (BoG) has initiated a major review of its monetary policy framework, aiming to adopt more dynamic tools that will enhance liquidity management and boost private sector-led growth. This marks a strategic shift in the central bank’s approach to managing the country’s monetary environment, with a particular focus on improving economic resilience.
As part of the new direction, the BoG will prioritize enhanced Open Market Operations (OMO), including the use of longer-tenor financial instruments. This approach is expected to provide more flexibility and control over monetary conditions compared to the current system.
The central bank is gradually moving away from its previous reliance on the unremunerated Cash Reserve Ratio, a traditional tool used to manage liquidity. Instead, it seeks a more proactive monetary stance through active market operations that respond better to the economic climate.
Governor Dr. Johnson Asiama explained that the new policy direction is crucial for reinforcing the gains made in reducing inflation while supporting Ghana’s fragile economic recovery. The goal is to strike a balance between maintaining price stability and accelerating economic activity.
Speaking at the 124th Monetary Policy Committee meeting in Accra, Dr. Asiama emphasized that the revised framework will strengthen policy effectiveness, improve liquidity flows, and enable increased credit to the private sector — a vital component for long-term economic growth.
Source: Citi newsroom