By 
The Bank of Ghana Governor, Dr Johnson Pandit Asiama, has acknowledged that the country’s successful fight against inflation in 2025 came at a significant financial cost, even as he expressed optimism that maintaining stability in 2026 will require fewer resources.
Speaking at the Kwahu Business Forum Governor’s Roundtable on April 5, Asiama highlighted the complex trade-offs central banks must navigate in balancing price stability with economic growth.
“The cedi is stable and under control,” he noted, adding that monetary policy decisions are inherently about finding equilibrium. “The work we do is always about trade-offs… trying to strike the right balance.”
According to the Governor, aggressive liquidity management measures—particularly open market operations—were instrumental in reducing inflation from 23.8 per cent in December 2024 to 5.4 per cent by the end of 2025. However, these interventions significantly increased operational costs for the central bank.
“Last year was good but expensive for the central bank. It took us a lot of money to mop up excess liquidity and bring inflation down,” he said.
Despite the cost burden, Asiama emphasised that curbing inflation remains critical to safeguarding real incomes and ensuring macroeconomic stability. Rising prices, he noted, erode purchasing power and can undermine broader economic progress if left unchecked.
Looking ahead, the Governor expressed confidence that the current low inflation environment will reduce the need for similarly aggressive—and costly—interventions.
“If you look at where inflation was at the end of December 2024 and where it is now, it won’t involve the same level of resources to keep it low and stable going forward,” he stated.
He also underscored the importance of a strong and resilient banking sector, noting that well-capitalised financial institutions are better positioned to extend credit to businesses and support economic expansion.
“When banks are strong, they can give more credit,” Asiama said, calling for continued collaboration between the central bank and financial institutions.
The Governor’s remarks reflect a broader global reality, as major monetary authorities such as the US Federal Reserveand the European Central Bank also grapple with the high cost of tightening monetary policy to rein in inflation.
With inflation now trending lower, Ghana’s policy outlook suggests a transition from aggressive stabilisation to a more sustainable phase of economic management—one that balances cost efficiency with continued price stability.
Comments