Omanghana
The Bank of Ghana has disclosed that its liquidity management costs for 2025 reached GH¢17 billion, reflecting the high price of efforts to stabilize the country’s financial system and control inflation. Despite the sharp rise in expenses, the central bank says the costs are beginning to ease as Ghana’s macroeconomic conditions improve.
Speaking on the development, Governor Johnson Pandit Asiama explained that the spending was largely driven by aggressive liquidity mop-up operations designed to absorb excess cash from the banking system and strengthen the effectiveness of monetary policy.
The GH¢17 billion recorded in 2025 represents a 97.7 percent increase compared with the GH¢8.6 billion spent in 2024. The figures also highlight how much higher the current costs are compared to earlier stable periods. In 2020 and 2021, sterilization expenses averaged about GH¢5.65 billion annually, meaning current levels are nearly three times higher.
The central bank’s interventions played a significant role in reducing inflation. According to official data, inflation declined sharply from 23.8 percent in December 2024 to 3.3 percent by February 2026. Authorities credit the liquidity management measures with helping restore price stability and strengthening confidence in the economy.
Beginning in early 2025, the Bank of Ghana removed approximately GH¢65 billion from circulation through various monetary operations aimed at curbing excess liquidity in the financial system.
Several factors contributed to the high cost of these operations. One major issue was structural excess liquidity within the banking sector, which required the central bank to intensify its open market operations to maintain control over the money supply. In addition, the high interest rates paid on financial instruments used to absorb funds significantly increased the overall cost of the program.
The financial sector adjustments that followed Ghana’s Domestic Debt Exchange Programme also placed pressure on bank balance sheets, creating additional complexities for monetary management. At the same time, the appreciation of the Ghanaian cedi during 2025 resulted in valuation losses on the central bank’s foreign currency holdings.
Looking ahead, the Bank of Ghana expects the cost of liquidity management to decline gradually as inflation stabilizes and interest rates return to more normal levels. Reflecting the improving economic outlook, the central bank reduced the monetary policy rate to 15.5 percent in January 2026.
International partners are also weighing in on how the costs should be handled going forward. The International Monetary Fund has recommended that some of the stabilization expenses be transferred from the Bank of Ghana’s balance sheet to the national budget to protect the central bank’s financial position.
Source: Omanghana
