The central bank is tightening its grip on money supply by absorbing surplus liquidity, thus helping to stem speculative currency pressures while preserving external balance.
The Bank of Ghana mopped up a total GH¢79.8billion through its liquidity absorption operations between January and April 2025 – marking a 76.6 percent jump from GH¢45.1billion during the same period last year.
The surge in tightening was most pronounced in April, when the central bank drained a record GH¢33.3billion from the financial system following it’s 123rd Monetary Policy Committee meeting in March 2025.
It also signals a firm commitment to anchor inflation expectations and maintain macroeconomic stability under Ghana’s IMF-supported reform programme.
The BoG notes that tight liquidity management, reinforced by complementary policy tools is crucial to keeping disinflation on track.
The total mop-up in just four months of 2025 represents nearly 60 percent of the entire 2024 total of GH¢134billion, underscoring BoG’s intensified effort to control money supply and stabilise the macroeconomic environment.
OMO instruments, once a routine tool of liquidity fine-tuning, have taken centre-stage in BoG’s tightening toolkit. The central bank recently introduced a 273-day sterilisation bill and launched a review of the cash reserve ratio framework to further strengthen monetary policy transmission.
The central bank’s aggressive mop-up appears to be bearing early fruit. Headline inflation eased to 21.2 percent in April from 22.4 percent in March – well below the 41.2 percent rate recorded a year earlier.
Investor appetite remains robust. Strong demand at auctions has been driven by improved macroeconomic sentiment and relatively stable exchange rate conditions.
