Governor of the Bank of Ghana (BoG), Dr Ernest Ato Addison has reaffirmed the bank’s commitment to curbing inflation to a single digit.
“The Bank of Ghana is fully committed to bringing inflation back within our single-digit objective, presently the inflation outlook is broadly supportive and positive,” the Governor stated.
The governor’s remarks come as the country completes its third review process with the IMF, which aims to secure the release of additional financial support.
The IMF staff team, on Thursday, October 4, 2024 met with the Finance Minister, Mohammed Amin Adam, the Bank of Ghana Governor, Ernest Addison, along with representatives from various government agencies.
Over the past few weeks, the Governor indicated that the BoG had collaborated closely with IMF teams to provide comprehensive data on the economy.
“We are grateful for the maximum cooperation as we end the Mission, this should hopefully lead to approval at the IMF Executive Board level and the release of another tranche of IMF support,” Dr. Addison said.
Dr. Addison highlighted recent trends in inflation rates, revealing that inflation peaked at 25.8% by the end of the first quarter, before dropping to 20.4% by the end of August.
However, the latest figures for the third quarter showed a slight increase to 21.5%, primarily due to rising food prices. “It is not unusual to see intermittent upticks in inflation,” he explained.
The Bank is determined to maintain a stable monetary policy to manage inflation effectively. “We will continue to monitor these developments and ensure that inflation stays within our target over the medium term,” Dr. Addison affirmed.
In addition to addressing inflation, the Bank of Ghana is focused on strengthening foreign exchange reserves, aiming for at least three months of import cover. The governor cited stronger external sector performance, driven by higher gold production and remittances, as contributing factors.
“Our Gold for Reserve programme is providing the much-needed support for this reserve build-up,” he added.
Furthermore, the Bank is committed to ensuring exchange rate flexibility to mitigate economic shocks.
Dr. Addison noted that most banks are ahead of schedule in implementing their recapitalization plans following a recent debt exchange.
As the economic landscape continues to evolve, the Bank of Ghana remains vigilant. “We will continue to monitor emerging risks in the economy and respond with prudent policy interventions,” he concluded.
“This will ensure that our key objectives of safeguarding our price and financial stability mandate are protected.”
With these assurances, stakeholders in the Ghanaian economy are hopeful for a swift return to stability and growth as the IMF discussions progress.
