Go through the streets and you’ll hear everyone talking about the cedi, and for good reason. Ghana’s local currency has shown remarkable resilience in recent weeks, appreciating steadily against major trading currencies. But with the positive momentum has come skepticism from some quarters, questioning whether the rally is real or being propped up artificially by the central bank.
Addressing these concerns, the Bank of Ghana’s First Deputy Governor, Dr. Mumuni Zakaria, has unequivocally affirmed that the cedi’s gains are authentic and driven by real market confidence, not excessive central bank intervention.
“We are not intervening recklessly,” Dr. Zakaria told Joy News. “We’re building confidence, not burning reserves. This is not smoke and mirrors. This is real. And we intend to sustain it.”
He stressed that if the Bank were heavily supporting the market, Ghana’s reserves would be depleting, yet, quite the opposite is happening. “We are actually accumulating reserves much faster than expected,” he said. “If we were heavily propping up the market, smart investors would have seen through it, and the rally would have been short-lived.”
According to Dr. Zakaria, Ghana’s gross international reserves surpassed $10 billion by April and are expected to reach $11 billion by June, comfortably exceeding the IMF’s three-month import cover target. By IMF measures, Ghana currently holds 3.7 months of import cover, or 4.7 months when including petroleum funds.
Importantly, these reserves are “organically accumulated,” not financed by debt, reinforcing the sustainability of Ghana’s external buffers.
The Deputy Governor highlighted strategic policy innovations that allow the Bank of Ghana to meet forex demand while steadily building reserves. “This time is different,” he said.
He also pointed to broader macroeconomic improvements supporting the cedi’s strength: the recent Staff Level Agreement with the IMF has boosted global market confidence, inflation has eased from nearly 24% to 21.2%, and fiscal consolidation is beginning to take hold with reduced public sector borrowing.
Monetary tightening has been intensified through liquidity sterilization, with the Bank absorbing three times more liquidity than last year to keep the cedi’s liquidity tight without constraining forex availability.
