Amid the challenges on Ghana’s forex market, public policy think tank IMANI Africa has raised concerns about the integrity of BoG’s stated interbank foreign exchange (FX) rates prevailing currently.
IMANI claims the Bank of Ghana (BoG) is deliberately keeping the interbank rate artificially low to create the illusion of cedi strength and macroeconomic stability.
This approach, IMANI believes, is fueling deeper distortions in the foreign exchange ecosystem.
“The Bank of Ghana is deliberately keeping the interbank rate low in order to signal currency strength. In doing so, it hopes to manage expectations, shore up investor confidence, and present the image of macroeconomic stability,” IMANI indicated.
A Distorted Market
The think tank in a policy brief of the situation, emphasises that the interbank market, where banks trade foreign currency among themselves, no longer reflects true demand and supply dynamics.
According to IMANI, trades on the interbank market are thin and symbolic, merely serving to tick regulatory boxes, rather than clearing actual market pressures.
The think tank says that the interbank market is tightly monitored by the BoG. Banks conduct only light trades at the official rate, which does not reflect real volumes or pressures.
“This approach creates a fundamental distortion: the price of the cedi is being managed, not discovered through real market activity. The interbank market is no longer truly reflective of demand and supply. It is tightly watched by the BoG, and banks conduct only light trades at the official rate, trades that do not represent real volumes or real pressure,” the policy indicated.
Commercial Banks Reluctant to Sell Dollars
Because the official interbank rate undervalues the dollar compared to what the market is willing to pay, commercial banks face potential losses if they sell dollars freely.
As a result, banks have become reluctant to offer dollars at the BoG rate, contributing to dollar scarcity in the formal market.
IMANI notes that the BoG rate underprices the dollar, so banks would take a hit selling at that rate.
“Commercial banks are reluctant to sell dollars at the official rate. The rate underprices the dollar relative to what the market is willing to pay, meaning banks would take losses if they sold freely. This has led to rationing in the formal FX market and a shift of supply toward informal channels,” IMANI observed.
Emergence of a Two-Tier FX System
This misalignment has led to the emergence of a dual foreign exchange market. On one hand is the official interbank rate, which is often lower and not widely accessible.
On the other is the actual market rate, which businesses, traders, and importers are forced to pay, reportedly ranging around GH¢11.50 or more to the dollar.
The situation is fueling the operations of the black market where businesses and customers get the FX at higher rates despite the BoG’s approved rates. With limited dollar availability through formal channels, many importers and SMEs have been forced into the grey or informal market.
This shift raises operational costs, increases the risk of exchange rate speculation, and weakens the central bank’s control over the FX market.
“A two-tier FX system has emerged: an official price that looks good on paper and a real price that importers and traders actually pay, often GH¢11.50 or higher. This not only pushes businesses into grey markets but also feeds speculation,” IMANI noted.
Let Market Forces Work
In light of these distortions, IMANI is urging the BoG to allow greater transparency and flexibility in the FX regime.
The think tank argues that managing perceptions through an artificial exchange rate may backfire, as credibility is lost and market participants seek alternatives.
For IMANI, the Bank of Ghana must decide whether to continue managing optics or to embrace a more realistic, market-based approach that restores trust and liquidity in the system.
