Bank of Ghana Governor Dr. Johnson Asiama has clarified the central bank’s approach to managing the stability of the Ghanaian cedi, emphasizing that sustained exchange rate calm does not imply a fixed or overvalued currency but rather alignment with macroeconomic fundamentals.
Speaking in an interview with Joy News, Asiama noted the cedi’s 2.76% appreciation against the U.S. dollar as of April 2025, marking one of its most stable periods in recent years, while cautioning against misinterpretations of this trend.
“Stability does not mean fixing the cedi or allowing excessive appreciation, which could harm export competitiveness,” Asiama explained. “Our focus is ensuring the currency remains within a range consistent with macroeconomic stability, avoiding misalignment in real terms.” He underscored that the central bank’s strategy prioritizes mitigating volatility rather than rigid control, allowing natural market dynamics to guide the cedi’s trajectory.
Key to this stability, according to Asiama, are ongoing foreign exchange market reforms and a surge in reserve accumulation. He stressed that the Bank of Ghana is not propping up the cedi through direct market interventions or depleting reserves. Instead, reforms aimed at enhancing transparency and boosting investor confidence have strengthened inflows. “Our reserves are growing daily. The stability we see stems from structural reforms, not short-term fixes,” he said.
The governor’s remarks come amid broader efforts to stabilize Ghana’s economy, which has faced inflationary pressures and currency fluctuations in recent years. By maintaining a balanced exchange rate, the central bank seeks to support exporters while curbing imported inflation. Asiama pointed to Ghana’s export sector, particularly cocoa and gold, as beneficiaries of a cedi that reflects real-term economic conditions rather than artificial controls.
Economists note that prolonged currency stability could bolster investor sentiment and reduce hedging costs for businesses. However, challenges remain, including global oil price volatility and external debt obligations. Asiama expressed confidence in the current policy framework, stating, “The days of excessive cedi volatility are ending. Sustained discipline in reforms will anchor long-term stability.”
Ghana’s foreign reserves, critical for cushioning external shocks, now cover approximately four months of imports, up from 3.6 months in 2023. This buffer, coupled with improved fiscal coordination, positions the country to navigate global economic uncertainties more effectively. As the Bank of Ghana continues to refine its strategies, the balance between currency stability and export competitiveness will remain pivotal to achieving broader macroeconomic resilience.
