The World Bank has cautioned the Bank of Ghana (BoG) against what it described as “excessive” interventions in the foreign exchange (FX) market, as Ghana’s cedi records one of its strongest performances in recent years. This comes after similar caution by the International Monetary Fund (IMF).
In its 9th Ghana Economic Update, the Bank acknowledged that the cedi’s steady appreciation in the first half of 2025 reflected a mix of tighter monetary policy, fiscal consolidation, record reserve accumulation, and improved investor sentiment. Interventions by the BoG, it noted, also played a role.
“This appreciation was supported by a tighter monetary policy stance, ongoing fiscal consolidation, record reserve accumulation, improved market sentiment, and interventions by the Bank of Ghana (BoG) in the foreign exchange (FX) market to manage liquidity,” the report said.
However, the Bank urged caution, warning that such interventions risk distorting the currency market and undermining the flexibility of Ghana’s exchange rate regime. “FX interventions by the BoG should be managed carefully to avoid distortions in the currency market and allow for a more flexible exchange rate regime,” it advised.
The cedi has traded steadily between GH¢10 and GH¢11 to the US dollar on the interbank market in recent weeks, underpinning growing confidence in Ghana’s macroeconomic outlook.
On inflation, the World Bank highlighted a sharp turnaround in 2025, after a period of flattening disinflation last year. Headline inflation fell to 13.7% in June 2025, marking six consecutive months of decline.
“This marked the sixth consecutive decline since December 2024, reflecting a broad-based reduction in core, food, and non-food inflation. The decline was influenced by a tighter monetary policy rate of 28%, improved macroeconomic conditions, and a significant rebound of the currency,” the report added.
With inflation easing and the cedi firming, the World Bank stressed the importance of policy discipline to sustain gains without creating artificial pressures in the FX market.
