Governor Asiama warns against premature easing, stressing the need to consolidate recent stability gains and guard against external and domestic risks
The Bank of Ghana (BoG) has advised caution as its Monetary Policy Committee (MPC) begins deliberations on the appropriate policy response to improving macroeconomic conditions, warning that recent gains do not automatically justify an immediate shift toward monetary easing. The call for restraint was made by Governor Dr. Johnson Asiama at the opening of the MPC’s first meeting for 2026, as policymakers assess whether current economic trends are strong and durable enough to support a change in the policy stance.
According to Dr. Asiama, while key indicators point to a gradual recovery, the progress achieved remains fragile and must be carefully protected. Inflationary pressures have moderated, the cedi has shown signs of stabilisation, and investor confidence is beginning to return. However, the Governor cautioned that these positive developments could quickly be reversed if policy decisions are taken too hastily or without due consideration of underlying risks.
“The real challenge before us is to lock in stability,” Dr. Asiama said, emphasising that the priority for policymakers should be to consolidate recent gains rather than respond prematurely to short-term improvements. He stressed that monetary policy must remain forward-looking, taking into account not only domestic conditions but also a range of external factors that could affect Ghana’s economic outlook. These include global financial market volatility, geopolitical tensions, shifts in major economies’ interest rate policies, and fluctuations in commodity prices, all of which have the potential to influence inflation, capital flows, and exchange rate stability.
The Governor also highlighted the importance of managing market expectations. With some analysts and investors anticipating a possible interest rate cut in light of easing inflation and signs of economic recovery, he warned that an abrupt policy reversal could undermine confidence if it is not supported by strong and sustainable fundamentals. Maintaining credibility, he noted, requires consistency, discipline, and clear communication from the central bank.
Dr. Asiama added that anchoring inflation expectations remains a core objective of the BoG. Although recent data suggest that price pressures are softening, the risk of renewed inflation cannot be ruled out, particularly if global shocks or domestic supply constraints re-emerge. As such, the MPC must ensure that any policy adjustment is robust enough to withstand future economic disturbances and maintain public trust.
The Monetary Policy Committee is expected to conclude its deliberations and announce its policy rate decision on Wednesday, January 28, 2026. Market participants will be watching closely for signals on the future direction of interest rates and liquidity conditions. However, the central bank’s latest messaging suggests that caution, rather than haste, will guide its approach as it seeks to entrench stability and support sustainable economic growth.
