First Deputy Governor of the Bank of Ghana, Dr. Zakaria Mumuni, says the cedi’s recent strength is not only a dramatic reversal from last year but also unmatched since Ghana adopted a flexible exchange rate regime.
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“Year to date, the cedi has appreciated by 12.2%,” Dr. Mumuni said on PM Express Business Edition. “At this time last year, it had depreciated by about 13%. So this is a complete turnaround.”
Calling it “maybe unprecedented,” he attributed the cedi’s performance to the Bank’s firm and strategic policy mix. “This is the only time since the start of the floating rate regime that we’ve seen this level of strength in the first four or five months of the year,” he explained.
Dr. Mumuni stressed that the surge is driven mainly by domestic policies, not external factors. “Our internal decisions had more impact on this performance than external conditions. It reflects the careful mix of policies we implemented,” he noted.
One of the key actions was raising the policy rate, a move that drew sharp criticism at the time. “When we hiked the rate, groups like GUTA opposed us. Analysts weren’t happy either. But we knew what we were doing and now, you can see the results,” he said.
He credited the Bank’s aggressive liquidity management and open market operations for driving disinflation. “We tightened monetary policy to restart the disinflation process, and it’s working,” he added. “The increase in the cash reserve ratio also helped absorb excess cedi liquidity.”
According to Dr. Mumuni, these bold but unpopular measures are now restoring credibility to Ghana’s economic framework. The Bank of Ghana, he insisted, is confident that its strategy is working and the cedi’s rally is just the beginning.
