Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, says the cedi’s period of excessive volatility against the US dollar is ending, with stability expected to continue.
Speaking to Joy Business on the sidelines of the IMF/World Bank Spring Meetings in Washington, D.C., Dr. Asiama assured that the central bank would maintain measures to preserve the current stability.
“Going forward, we have enough reserves to maintain the current stability the cedi is enjoying against the US dollar,” Dr. Asiama said. However, he emphasized that the BoG would not shift to a fixed exchange rate regime. “The cedi is an endogenous variable, and we must allow it to float. What the Bank of Ghana aims to do is ensure there is no excessive volatility,” he added.
Reasons Behind the Cedi’s Stability
The cedi has recorded one of its longest periods of stability in recent years. Since December 2024, the local currency has remained largely steady, even appreciating on some occasions.
Data from the Bank of Ghana and commercial banks show that, as of April 2025, the cedi had appreciated by 2.76 percent against the dollar. Bloomberg data also indicated that by April 28, 2025, the dollar was being sold at GH¢15.58, with some quotes as low as GH¢15.40.
Market analysts attribute the cedi’s resilience to several factors, including:
- Active liquidity support from the BoG.
- The Bank’s Gold Purchase Programme, which has boosted market confidence and reduced speculative activity.
- Stronger-than-expected buildup in international reserves, supported by the IMF’s Extended Credit Facility (ECF) programme.
According to the BoG, Ghana’s international reserves reached $9.3 billion by the end of February 2025, surpassing IMF programme targets.
Governor’s Perspective
Dr. Asiama identified improved external sector performance, driven by strong remittances and better gold and cocoa export earnings as major contributors to the cedi’s stability. He also highlighted effective coordination between fiscal and monetary policies and a globally weaker US dollar as supportive factors.
“The fiscal side has been supportive of monetary measures, helping to maintain the current development,” he noted.
Impact of the IMF Programme
The Governor further pointed to the recent Staff Level Agreement with the IMF as a critical boost to investor confidence.
“The Staff Level Agreement was like a stamp of approval for the government’s efforts to restore macroeconomic stability,” he said, adding that fiscal and monetary discipline is helping to realign market expectations.
Outlook for Inflation
Dr. Asiama expressed optimism that the stronger cedi would help drive inflation lower in the months ahead.
“This should be complemented by the monetary measures the Bank of Ghana is implementing to continue driving inflation down,” he stated.
