The Bank of Ghana (BoG) has attributed the recent stability of the cedi to sustained market reforms and macroeconomic discipline, rejecting claims that direct dollar injections are propping up the local currency.
Governor Dr. Johnson Asiama, speaking during the IMF/World Bank Spring Meetings in Washington, D.C., emphasized that the central bank’s strategy prioritizes long-term structural adjustments over short-term reserve spending.
“The cedi’s resilience is not a result of artificial support through foreign exchange reserves,” Asiama stated. “This stability stems from improved market operations, stronger external inflows, and coordinated policymaking.” The cedi has gained 2.76% against the U.S. dollar since December 2024, with commercial banks quoting exchange rates between GH¢14.38 and GH¢15.58 as of April 2025 a shift signaling renewed investor confidence.
Key drivers of the currency’s performance include heightened remittance inflows, robust gold and cocoa export earnings, and a weaker U.S. dollar globally. Asiama highlighted the alignment of fiscal and monetary policies as critical to maintaining macroeconomic equilibrium. “The synergy between government spending controls and interest rate management has created a stabilizing environment,” he said, reaffirming Ghana’s commitment to a market-driven exchange rate. “We will not revert to fixed-rate regimes. Market forces must dictate valuations.”
The central bank’s approach marks a departure from past reliance on reserve depletion to manage currency volatility. Instead, efforts focus on enhancing transparency in foreign exchange markets and leveraging natural inflows from key export sectors. While skeptics question how long the cedi can sustain its gains without direct intervention, the BoG insists its reforms aim to address systemic vulnerabilities rather than offer temporary relief.
Ghana’s strategy emerges as a notable contrast to central banks in other emerging markets, where heavy reserve spending to defend currencies has led to depleted buffers. The cedi’s performance, bolstered by a 12% year-on-year rise in gold exports and record cocoa prices, underscores the potential of commodity-driven economies to leverage global market trends. Yet challenges persist, including the need to stabilize public debt and mitigate inflationary pressures from energy sector reforms.
As the BoG navigates these complexities, its emphasis on institutional over interventionist measures reflects a broader shift toward sustainable economic governance. The coming months will test whether this reform-focused blueprint can solidify the cedi’s gains while supporting broader growth a balancing act requiring continued policy coherence amid global financial uncertainty.
