Ghana’s inflation has dropped to one of its lowest levels in recent history, a development the Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, attributes largely to the central bank’s sterilisation strategy and the sharp appreciation of the cedi.
According to the Governor, a combination of prudent monetary management and currency stability has helped drive inflation down to record levels. Ghana’s year-on-year inflation rate declined further to 3.3 percent in February 2026, down from 3.8 percent recorded in January. The figure represents a significant decline from the 23.1 percent inflation rate recorded in February last year.
Dr Asiama explained that the appreciation of the cedi alongside the Bank of Ghana’s policy interventions had a strong impact on the downward trend in prices.
The Governor noted that “it is because of the sharp appreciation of the cedi and the prudent sterilisation measures that have also helped in delivering this record inflation”.
He made the remarks in an explanatory note addressing recent economic developments, including inflation trends, the Bank of Ghana’s financial position, the Gold for Reserve Programme, and the outlook for the cedi.
Role of Monetary Policy in Inflation Control
Inflation targeting remains a key component of the Bank of Ghana’s mandate. In recent years the central bank has deployed several monetary policy tools to manage liquidity and contain price pressures in the economy.
Sterilisation measures, which involve withdrawing excess liquidity from the financial system, have been central to the BoG’s strategy. These measures help control money supply, stabilize exchange rates, and reduce inflationary pressures.
Economic analysts have widely acknowledged the role of the central bank in stabilizing the economy over the past year. Some analysts have credited the Bank of Ghana for the cedi’s stability and the sharp drop in inflation.
They point to the central bank’s consistent use of monetary policy tools to curb inflationary pressures in 2025 and early 2026.
However, some analysts also argue that these interventions came at a financial cost to the central bank, particularly in relation to the sterilisation operations needed to manage liquidity.
Despite the cost implications, the Bank of Ghana maintains that the overall benefits to the economy outweigh the financial burden borne by the institution.
Economic Cost of Stabilising the Economy
While Ghana’s current inflation rate marks a major milestone in macroeconomic management, Dr Asiama acknowledged that achieving this outcome required significant policy effort and financial cost.
He noted that the economic gains seen today did not come without sacrifices.
The Governor explained that “this was delivered at a cost, and as reforms continue, these costs will drop sharply”.
Dr Asiama also addressed concerns about the Bank of Ghana’s financial losses recorded in 2024, stressing that these figures must be assessed within the broader economic context.
According to him, the financial results of the central bank should not be viewed in isolation without considering the wider macroeconomic benefits that the policy measures produced.
Responding to questions about the Bank’s inflation targeting programme, the Gold for Reserve initiative, and the associated costs, the Governor encouraged observers to consider the broader economic gains achieved over the past year.
He asked what the real benefit to the economy had been despite the losses recorded by the Bank of Ghana. He also questioned whether the policies had led to the sharp appreciation of the cedi and historically low inflation levels, and what the overall gains had been for the Ghanaian economy.
Changes to the Gold for Reserve Programme
Dr Asiama also addressed issues relating to the Gold for Reserve Programme, particularly concerns about the financial costs associated with the initiative.
According to him, the programme’s fees and charges have been significantly reduced in recent months. These costs previously contributed to the central bank’s losses.
He explained that the associated fees and charges under the G4R programme have now “reduced by half”.
This adjustment is expected to ease some of the financial pressures on the Bank of Ghana moving forward.
The Governor further indicated that any losses linked to Goldbod operations will be absorbed by government after the reduction in the programme’s operational costs.
He described the financial pressures currently being discussed as largely a one-time cost associated with broader economic reforms aimed at resetting the economy.
Positive Outlook for the Cedi and BoG
Looking ahead, Dr Asiama expressed confidence that the financial pressures faced by the central bank will not continue in the coming years.
He indicated that the Bank of Ghana is unlikely to record similar losses in 2025 and 2026 due to improved macroeconomic conditions and declining policy costs.
According to him, “In 2026, the cedi won’t drop by that much again, hence the losses will not be repeated”.
He also pointed out that falling inflation and declining policy rates will reduce the cost of sterilisation operations.
“Secondly, now that inflation is at 3.3%, and the policy rate is coming down, sterilisation costs will drop significantly.”
Dr Johnson Asiama
These developments are expected to strengthen the financial position of the central bank while sustaining macroeconomic stability.
Dr Asiama maintained that the losses incurred during the recent economic adjustment phase should be viewed as temporary.
He emphasized that “These losses will not be repeated in 2026”.
With inflation declining sharply, the cedi recording one of its strongest performances in history, and policy costs expected to ease, the Bank of Ghana believes the country’s economic stabilization efforts are beginning to deliver meaningful results.
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