While businesses are clamoring for the Bank of Ghana (BoG) to loosen its tight monetary policy, which has significantly cooled inflation, the International Monetary Fund (IMF) is recommending otherwise, calling on the Central Bank not to pull the brakes, at least not yet.
Ghanaians are finally catching a break at the market. Prices are no longer rising like wildfire. After peaking at 54% in December 2022, inflation has now fallen to 14% as of June 2025, a remarkable turnaround by any standard.
But the IMF says Ghana should not get comfortable since it is not out of the woods yet.
At a press briefing in Washington, D.C., following Ghana’s presentation of its 2025 Mid-Year Budget Review to Parliament, Julie Kozack, Communications Director of the IMF, praised Ghana’s progress but urged the Bank of Ghana not to take its foot off the brakes too soon.
“Ghana has made good progress… Inflation was extremely high at the end of 2022 at 54%, and it has now tumbled substantially to 14% at the end of June 2025,” Kozack said.
The IMF’s Communications Director further said, “Going forward, it will be important for monetary policy to remain sufficiently tight, consistent with bringing inflation down to the Bank of Ghana’s target range of 8% plus or minus 2 percentage points.”
In plain terms, the IMF says the BoG should not cut interest rates too quickly, although things are looking better compared to previous years.
The IMF’s advice is coming just weeks before the Bank of Ghana’s Monetary Policy Committee (MPC) meets to decide whether to adjust interest rates.
That decision could affect everything from your next loan to the price of bread in the market.
This warning means there is a temptation for the central bank to relax its current “tight” monetary policy, especially since inflation is falling and the cedi is performing strongly.
When inflation was high, the Bank of Ghana raised interest rates to discourage excessive borrowing and spending, which helped slow down price increases. This tough love approach worked, but the IMF says it needs to be sustained a little longer to reach the central bank’s ideal inflation target of 6–10%.
Cutting rates too soon might feel good in the short term as businesses will borrow more, and consumers will spend more, and therefore risks fanning the inflation flame.
All eyes are now on the next MPC meeting later this month. The big question: Will the Bank of Ghana listen to the IMF and hold the line, or will it bow to growing pressure to ease things up?
While it’s ultimately a domestic decision, the IMF’s voice carries weight, especially under Ghana’s current $3 billion programme with the Fund.
