Bank of Ghana (BoG) Governor Dr Johnson Pandit Asiama has given his clearest public account yet of the financial price Ghana’s central bank paid to tame inflation in 2025, telling the business community the heavy lifting is over and that sustaining price stability in 2026 will cost significantly less.
Dr Asiama made the remarks on Sunday, April 5, at the Governor’s Roundtable session of the Kwahu Business Forum, held under the theme “The Future of Business: The Role of the Financial Sector.” The forum, which ran from April 3 at the Kwahu Convention Centre, brought together business executives, investors, policymakers, and development partners.
The Bank of Ghana spent approximately GH¢17 billion managing excess liquidity in 2025, a process that helped deliver one of the sharpest inflation declines in Ghana’s recent history. Inflation fell from 23.8 percent at the close of 2024 to 5.4 percent by December 2025, a reduction of 18.4 percentage points achieved through aggressive Open Market Operations (OMO).
“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 to 5.4% by December 2025,” Dr Asiama told the gathering.
The central bank’s OMO activities involve issuing BoG Bills that commercial banks purchase, effectively draining excess liquidity from the financial system. The cost of these operations is directly linked to the prevailing policy rate, and with the rate elevated throughout much of 2025, interest payments to commercial banks proved substantial. The approach is standard practice among major monetary authorities globally, including the United States Federal Reserve and the European Central Bank (ECB), both of which have confronted similar balance sheet pressures in recent years.
Dr Asiama highlighted exchange rate stability as a key outcome of the Bank’s policy interventions, stating that “the cedi is stable and under control” and explaining that currency stability reduces uncertainty for businesses, particularly those reliant on imports or foreign-denominated obligations.
The Governor, however, was equally candid about why the cost of tightening was unavoidable. Central banks cannot afford to allow inflation to erode the real incomes of citizens simply because the tools to fight it are expensive. While wages may remain static, rising prices reduce purchasing power across the economy, disproportionately affecting lower-income households.
On the outlook, Dr Asiama expressed confidence that 2026 will be a different story. “If you look at where inflation was at the end of December 2024 and where it is now, it wouldn’t involve the same level of resources to keep it low and stable going forward,” he said. Inflation has since declined further to 3.2 percent, signalling improved price stability and strengthening confidence in the economy. With inflation already below 4 percent, the magnitude of monetary intervention required to hold it steady is far smaller than the effort required to bring it down from a 23.8 percent starting point.
Addressing the broader relationship between monetary stability and private sector growth, Dr Asiama urged the business community to view a strong banking sector as a prerequisite for economic expansion. “When banks are strong, they can give more credit,” he said, assuring participants that the Bank of Ghana remains committed to strengthening financial markets.
The roundtable marked the climax of the forum, with key attendees including Chief of Staff Julius Debrah, Eastern Regional Minister Rita Akosua Adjei Awatey, and Economic Advisor to the President Seth Terkper.
