The International Monetary Fund (IMF) has urged the Bank of Ghana (BoG) to proceed cautiously with further policy rate reductions, given potential second round effects from the impact of the war in the Middle East on energy and fertiliser prices, the fiscal relaxation under the Policy Coordination Instrument, and persistent risks from the high exchange rate pass-through.
Additionally, the Bretton Woods institution said easing would risk shifting the monetary policy stance from neutral to accommodative, which would not be warranted.
The Fund added that the BoG is near the end of a monetary easing cycle that brought the policy stance to neutral.
In March 2026, the BoG’s monetary policy committee (MPC) decreased its policy rate by 400 basis points to 14%, bringing cumulative cuts to 1,400 basis points since July 2025.
The MPC kept the policy rate unchanged in May 2026. With inflation projected to return to the BoG’s 8±2% target by end-2026 and the estimated real neutral rate around 5.0%, the ex-ante real policy rate is broadly consistent with a neutral policy stance.
Meanwhile, the IMF says the BoG is reforming its monetary policy operations.
In December 2025, the BoG replaced its 56-day bills with 14-day bills to strengthen liquidity management.
Following this operational change, the BoG bill supply became limited, reducing liquidity absorption and boosting the use of the standing deposit facility. This pushed BoG bill and interbank rates towards the bottom of the interest rate corridor, effectively loosening monetary conditions by approximately 350 basis points relative to the policy rate.
In line with the IMF Staff advice, in June 2026, the BoG unified the cash reserve ratio (CRR) at 20%, eliminating the previous tiered structure (with 15% and 25% rates linked to loan-to-deposit ratio thresholds).
The BoG also required Cash Reserve Ratio (CRR) fulfillment in cedis, reversing the May 2025 decision that allowed fulfillment in the currency of deposits. These changes modestly increased unremunerated liquidity absorption through the CRR.
