The Bank of Ghana's fight against inflation and efforts to stabilise the cedi are significantly increasing its financial losses. A new report from the Centre for Economic Research and Policy Analysis (CERPA) highlights this growing financial strain.
CERPA explains that the central bank’s tight monetary policies, including high interest rates and measures to control money supply, come with substantial financial costs. These policies have helped contain inflation and ease pressure on the exchange rate. However, they have also worsened the Bank of Ghana's balance sheet.
This situation adds to broader concerns about the central bank's financial health. Ghana’s economic stabilisation measures have already led to reports of heavy losses. The current high-interest-rate environment makes it more expensive for the Bank of Ghana to remove excess money from the financial system. This process, aimed at reducing inflation, now carries higher costs.
CERPA’s report states, “To manage inflation and exchange rate pressures, the Bank of Ghana has relied heavily on open market operations, central bank bills, and high policy rate transmission.” The think tank describes a difficult balancing act for policymakers. They need tight monetary policies to control inflation and build economic confidence. Yet, these policies also place more financial pressure on the central bank.
The report also points to the weakening Ghana cedi as a major challenge. The depreciation of the local currency increases the domestic value of the Bank of Ghana’s foreign debts. This leads to additional losses for the central bank. CERPA notes that exchange rate volatility in 2025 likely worsened the central bank’s foreign currency position.
The think tank warns that this trade-off between fighting inflation and managing financial costs must be handled carefully. Poor management could undermine trust in monetary policy. CERPA also raised concerns about non-traditional or quasi-fiscal programmes. These include initiatives like Gold-for-Oil and Gold-for-Reserves.
These programmes were introduced to stabilise fuel prices and support foreign currency reserves. However, CERPA argues they go beyond the Bank of Ghana’s central duties. The organisation recommends a policy shift where the government gradually takes over these non-core programmes. This would allow the central bank to focus strictly on its main job of keeping prices stable. Continued involvement in non-traditional operations could further weaken its financial position.
This analysis comes as Ghana continues to navigate economic challenges. The government and the Bank of Ghana are working to restore stability. Understanding the financial implications of these actions is key for Ghana’s economic future.