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The Bank of Ghana (BoG) has discontinued its pre-financing arrangement for gold purchases by the Ghana Gold Board (GoldBod), marking a significant shift in the country’s liquidity management framework as policymakers assess the future direction of monetary policy.
Governor of the Bank of Ghana, Dr Johnson Pandit Asiama, announced that the central bank officially ended the pre-financing arrangement through its auction mechanism on July 1, 2026.
Speaking at the opening of the 131st Monetary Policy Committee (MPC) meeting in Accra on July 20, Dr Asiama said the policy change represents an important adjustment to Ghana’s domestic liquidity management strategy and will feature prominently in the committee’s assessment of the country’s monetary policy stance.
According to the Governor, the MPC will evaluate how the withdrawal of the financing arrangement, alongside other recent policy measures, has influenced banking sector liquidity, monetary policy transmission and broader macroeconomic conditions.
Liquidity impact under review
Dr Asiama explained that the decision comes at a time when private sector credit growth has strengthened considerably, making it necessary for policymakers to assess the implications of reduced central bank liquidity support.
He noted that understanding the effects of the new framework on financial system liquidity would be critical to determining the appropriate monetary policy response in the months ahead.
Global uncertainty remains a concern
The Governor said the committee’s deliberations are taking place amid heightened uncertainty in the global economy.
While a ceasefire reached in mid-June temporarily eased geopolitical tensions and moderated crude oil prices, renewed instability around the Strait of Hormuz has pushed Brent crude prices above $85 per barrel, increasing volatility across international energy markets.
The Bank will assess how these developments could affect Ghana’s external sector and inflation outlook.
Inflation edges higher but remains contained
On the domestic front, Dr Asiama described Ghana’s economy as resilient despite signs of rising inflation.
Headline inflation increased from 3.2% in March to 5.3% in June, largely driven by higher transportation and haulage costs.
However, he noted that inflation remains below the Bank of Ghana’s target range and significantly lower than the 13.7%recorded during the corresponding period last year.
According to the Governor, a key objective of the MPC meeting is to determine whether the recent increase reflects temporary cost pressures linked to imports or signals the beginning of a more sustained inflationary trend.
Economic growth remains strong
Dr Asiama said Ghana’s economy continues to record encouraging performance, with gross domestic product (GDP)expanding by 6.4% in the first quarter of 2026, compared with 6.2% during the same period in 2025.
He also highlighted the recovery in private sector lending, noting that real credit growth has rebounded after contracting a year earlier.
The Governor added that the Ghanaian cedi has remained relatively stable, although elevated levels of non-performing loans continue to pose risks to financial sector stability.
Four key issues before the MPC
According to Dr Asiama, the committee’s discussions will focus on four major policy considerations:
- The outlook for inflation and price stability.
- The effectiveness of recent reforms to the cash reserve ratio framework.
- The impact of ending the GoldBod pre-financing arrangement on domestic liquidity.
- The implications of renewed global oil price volatility for Ghana’s external position.
BoG launches MPC educational programme
As part of efforts to strengthen transparency and improve public understanding of monetary policymaking, the Bank of Ghana also launched its inaugural Monetary Policy Committee Educational Observership Programme.
The initiative allows selected students from the University of Ghana to observe aspects of the MPC process, providing first-hand exposure to the analytical framework and evidence-based decision-making that underpin the central bank’s policy formulation.
Dr Asiama said the programme is designed to strengthen collaboration between academia and policymakers while promoting a deeper understanding of Ghana’s monetary policy framework and the role of the central bank in maintaining macroeconomic stability.
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