The International Monetary Fund (IMF) has defended the Bank of Ghana’s stringent monetary tightening measures, asserting they were prudent steps necessary for macroeconomic stability, despite the central bank reporting a GH¢15.6 billion loss in its 2025 financial year. Dr. Ruben Atoyan, IMF Mission Chief, stated on Thursday that suggestions of the central bank being overly aggressive were unfounded, highlighting the positive outcomes of these policies.
Context of Economic Instability
Ghana has faced significant macroeconomic instability in recent years, marked by high inflation and a depreciating currency. This challenging economic environment necessitated a robust response from the Bank of Ghana to restore confidence and stabilize the economy.
Central Bank’s Financial Performance
The Bank of Ghana’s audited 2025 financial statements revealed a substantial GH¢15.6 billion operational loss, an increase from GH¢9.49 billion in 2024. The central bank’s negative equity position also worsened, deepening to GH¢93.82 billion from GH¢58.62 billion.
These financial setbacks are largely attributed to the costs associated with sterilisation and liquidity management operations. These operations are crucial tools used by the central bank to control inflation, stabilize the local currency (the cedi), and rebuild trust in the economy.
IMF’s Stance on Policy Measures
Dr. Atoyan explicitly rejected the notion that the Bank of Ghana’s actions were excessively aggressive. He characterized the monetary tightening as a “prudent” approach, emphasizing that its effectiveness is evident in the achieved economic outcomes, which he believes are recognized by the public.
Addressing concerns about the scale of the losses, Dr. Atoyan explained that the financial cost is an inherent and unavoidable consequence of combating inflation in an environment characterized by high interest rates. He stated, “There is a cost of doing monetary policy, and this is something that people need to understand.”
According to Dr. Atoyan, the recently published 2025 financial statements transparently document the financial burden incurred during the implementation of tight monetary policy amidst elevated inflation and interest rates. “Absorbing liquidity from the market is costly, and that’s what we see as reflected in the statement,” he noted.
Necessary Costs for Stability
While acknowledging the significant financial pressure these operations placed on the Bank of Ghana, Dr. Atoyan maintained that the measures were essential for future economic stability. “Yes, so it did generate some costs for the Bank of Ghana, but it was a necessary cost for the stabilisation going forward,” he asserted.
The IMF has consistently supported Ghana’s monetary tightening program as a key component of broader reforms under the country’s economic recovery efforts. Over the past two years, the Bank of Ghana has implemented aggressive interest rate hikes, liquidity absorption measures, and market interventions aimed at curbing inflation and strengthening the cedi.
Looking Ahead
The continued defense of these measures by the IMF suggests a sustained commitment to the current monetary policy path. As Ghana navigates its economic recovery, attention will remain on the Bank of Ghana’s ability to balance the need for continued stabilization with the management of its financial health. The effectiveness of these policies in achieving sustained economic growth and currency stability will be closely monitored in the coming quarters.
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