The Executive Director of the Institute of Economic Research and Public Policy, Professor Isaac Boadi, has called for a major change in the way Ghana’s monetary policy decisions are made.
Speaking on Business Focus on Monday, 2 February 2026, Professor Boadi argued that the Bank of Ghana’s Monetary Policy Committee (MPC) should move away from largely discretionary deliberations and instead adopt a more rules-based, scientific formula to determine the Monetary Policy Rate (MPR).
The MPR is the benchmark interest rate used by the central bank to signal its policy stance and influence borrowing costs across the economy.
Professor Boadi said he supported the central bank’s latest policy rate decision, noting that it broadly aligned with the outcome of his own economic model.
“This is the first time, one way or the other, that I can endorse this figure of about 15%,” he said. “Four months ago, I criticised a similar number, I think it was around 25% because, the basis points adjustment should have been higher. But this time, a 250 basis point adjustment, which brings the rate to about 15.5%, reflects the model I use,” he said.
He added that the central bank should consider formalising such an approach.
The Director stated that, “I think the Bank of Ghana should move away from the normal discretionary decision-making process and adopt a framework that helps. If you put all the indicators into a proper model the exchange rate stabilising after a sharp decline, strong foreign inflows supporting the economy, and an improved fiscal stance, you can justify a higher policy rate. Ultimately, it is about how you price money in an economy,” Prof Boadi noted.
Meanwhile, the Bank of Ghana’s Monetary Policy Committee meets regularly to assess economic conditions, including inflation, exchange rate movements and fiscal developments, before setting the policy rate.
Its decisions are closely watched by investors, businesses and households, as they influence lending rates, inflation expectations and overall economic activity.
