Assessing the role of Central Bank independence in effective inflation management

This article discusses the importance of central bank independence in managing inflation and maintaining economic stability.

An independent central bank, free from political influence, can commit to long-term price stability, enhance policy credibility, and make effective interest rate decisions.

The Bank of Ghana (BoG) became operationally independent under the 2002 Act but faces challenges due to its mandate to support government economic policies, which can conflict with inflation control.

Political influences in appointments and the need to finance fiscal deficits further complicate the BoG's autonomy, highlighting the delicate balance needed for effective monetary policy in Ghana.