GH¢17 billion stabilisation effort helps bring prices under control for Ghanaians

The Bank of Ghana's GH¢17 billion stabilisation effort in 2025 has delivered one of the sharpest declines in inflation in Ghana's recent history, Governor Dr. Johnson Pandit Asiama told Parliament on March 9, 2026.

Addressing the Parliamentary Committee on Economy and Development, the Governor noted that when he assumed office, inflation remained elevated and monetary conditions were not sufficiently tight to bring it down within an acceptable timeframe.

A key challenge at the time was the presence of excess structural liquidity in the banking system, which weakened the transmission of monetary policy and allowed inflationary pressures to persist.

To restore the effectiveness of monetary policy, the Bank of Ghana intensified open market operations, absorbing excess liquidity from the banking system and paying interest on those funds to ensure that too much money in circulation did not continue to drive inflation.

Measures in place to strengthen Bank of Ghana's resilience - Governor Asiama

“Liquidity management through open market operations is a core function of central banks around the world and is one of the primary tools used to ensure that monetary policy decisions are effectively transmitted through the financial system,” Dr Asiama explained.

According to the Governor, these decisive policy actions have helped restore stability to the Ghanaian economy and rebuild confidence across markets.

Inflation has declined sharply from 23.8 percent in December 2024 to 3.3 percent in February 2026, one of the lowest readings recorded in recent history. Lower inflation means that the wages and incomes of Ghanaians are no longer being rapidly eroded by rising prices.

The exchange rate has stabilised, interest rates have begun to decline, easing borrowing conditions for businesses and households, and confidence across the economy has improved. External buffers have also strengthened significantly, with gross international reserves rising to US$13.8 billion, providing about 5.7 months of import cover.

In keeping with the Bank’s commitment to transparency, Dr Asiama also shared the financial implications of the stabilisation measures undertaken by the Bank of Ghana, noting that the liquidity management operations required to absorb excess liquidity resulted in interest costs of approximately GH₵17 billion.

However, he emphasised that these financial effects must be understood alongside the economic gains that have followed.

“The financial effects that will be reflected in the Bank’s accounts are the accounting counterpart of the stabilization benefits now being realized across the Ghanaian economy,” he told Members of Parliament.

The Governor stressed that these measures were necessary to restore the effectiveness of monetary policy, reduce inflationary pressures, and stabilise the exchange rate.

“For ordinary Ghanaians, the most important signal of recovery is simple. Prices are stabilising, the cedi is steadier, and the economy is moving back toward normal,” he said.

Dr Asiama added that the Bank of Ghana remains committed to maintaining price stability and supporting the conditions necessary for sustainable economic growth.