Accra: The government will implement several measures to complement the Bank of Ghana's (BoG) monetary and exchange rate policies to stabilize inflation and the exchange rate. These measures include the establishment of the GoldBod, aimed at enhancing the generation and accumulation of forex to support the stability of the cedi.
According to Ghana News Agency, presenting the 2025 Budget Statement and Economic Policy of the government to Parliament in Accra, Finance Minister Dr. Cassiel Ato Forson stated that the BoG would also continue to implement its forex forward auctions to help stabilize the cedi. The budget, themed 'Resetting the Economy for the Ghana We Want,' outlined the government's fiscal plans.
Dr. Forson indicated that the government's strong fiscal consolidation, achieved through a reduction in public sector spending and the fiscal deficit, would ease pressures on the exchange rate. He explained that the government's import substitution drive under the 24-Hour Economy, which focuses on domestic production of key products that are usually imported, would reduce imports and the related forex requirements, thereby stabilizing the foreign exchange market.
Dr. Forson highlighted the government's efforts to address the inflation problem through various measures, including specific interventions like the Agriculture for Economic Transformation Agenda, which is expected to increase food production and reduce food inflation. He also mentioned that policies would target items with large weights in the Consumer Price Index (CPI) basket, such as transportation and utilities, to lower their prices.
Furthermore, Dr. Forson emphasized the government's aggressive fiscal consolidation efforts aimed at reducing the fiscal deficit and borrowing, which would significantly help lower inflationary pressures. He noted that the strategy to improve exchange rate stability would reduce import inflation and fuel prices. The BoG, he said, would maintain an appropriate monetary policy stance and use liquidity management interventions to support the disinflation process.
