The Governor of the Bank of Ghana, Dr. Johnson Asiama, has attributed the recent strong performance of the Ghana cedi to a combination of strong foreign reserves, robust monetary policy, and improving investor confidence driven by coordinated actions on both monetary and fiscal fronts.
Speaking after the latest Monetary Policy Committee (MPC) meeting in Accra, Dr. Asiama emphasized that the Bank does not have a specific exchange rate target for the cedi and is not actively working to slow its appreciation.
“We don’t have such a plan on the table that says when the cedi reaches a certain point, we must move to ease the appreciation,” he noted.
“As much as we don’t want to see the Ghana cedi depreciate excessively, we don’t keep a target rate that we want to defend aggressively.”
The cedi has appreciated by 24.1 percent against the US dollar so far in 2025, a significant development that the Governor says reflects structural progress, not manipulation or reserve depletion. As of the end of April, Ghana’s international reserves stood at $10.6 billion—equivalent to 4.7 months of import cover.
Market Sentiment and Currency Stability
Dr. Asiama underlined the increasing role of market perception in the cedi’s rise.
“We believe that market sentiments are now playing a significant role in the cedi’s sustained appreciation,” he said.
He added that while fluctuations are expected, the Bank’s goal is to avoid excessive volatility.
“You may see some swings, but our focus is to ensure that they are not excessive,” he stated.
Addressing public speculation, Dr. Asiama dismissed any notion that the Bank was intervening unnecessarily in the currency market.
“People are out there with all sorts of speculations, but remember, you haven’t heard the Bank of Ghana playing in that space. We will ensure that volatilities do not become excessive,” he said.
Business Impact and Inflation Outlook
A stronger cedi provides some relief for businesses, especially those reliant on imports. While traders and consumers have yet to see significant price drops, the central bank expects market forces to eventually drive prices down.
“It’s just a matter of time. We also believe that competition may play a significant role in the coming weeks, forcing traders to respond to current market developments,” Dr. Asiama said.
On inflation, the Bank of Ghana maintained the policy rate at 28 percent and introduced a new measure requiring banks to hold reserves in the same currency as their deposits. This aims to enhance monetary stability and encourage responsible banking practices.
Dr. Asiama noted a continued downward trend in the Ghana Reference Rate, expressing optimism that lending conditions will improve, unlocking credit for businesses.
The central bank remains confident in meeting its 12 percent inflation target by the end of the year and aims to return to single-digit inflation by the first quarter of 2026.
“I don’t think the end-of-year target is ambitious, looking at the policy measures we have undertaken,” Dr. Asiama said.
Reserve Adequacy and External Commitments
Ghana’s current reserve position, according to Dr. Asiama, is adequate to meet external debt obligations and support trade needs.
“There is no upper limit target for now, but we do have what you can call a lower limit of three months of import cover,” he explained.
“What we have now is pretty adequate.”
As Ghana works through its post-COVID and post-debt restructuring recovery, the strengthening cedi and improved macroeconomic fundamentals are creating a more predictable environment for businesses. Policymakers, Dr. Asiama concluded, are focused on maintaining stability while letting market forces shape the currency’s trajectory.
