BoG Governor outlines measures to sustain cedi gains

The Governor of the Bank of Ghana (BoG), Dr. Johnson P. Asiama, has called for a collective effort by all economic actors to sustain the significant gains made in the foreign exchange (FX) market and translate the improvements into real sector growth and broad-based economic transformation.

Delivering the keynote address at the Graphic Business/Stanbic Bank Breakfast Meeting held at the Labadi Beach Hotel in Accra yesterday, Dr. Asiama noted that Ghana had reached a critical turning point after three years of macroeconomic turbulence triggered by fiscal slippages, global financial tightening, and the domestic debt exchange programme (DDEP).

He stated that through coordinated fiscal, monetary, and institutional reforms, the Cedi had strengthened considerably, appreciating by over 42 per cent year-to-date as of June 2025, thereby reversing much of the losses incurred in 2022 and 2023.

The Governor indicated that gross international reserves had risen to US\$11.1 billion, providing 4.8 months of import cover, while the country had recorded a trade surplus of US\$4.14 billion within the first four months of the year, driven by strong performance in gold, cocoa, and oil exports. He added that the current account surplus had improved to US\$2.12 billion in the first quarter of 2025, compared to US\$66 million during the same period in 2024.

He also highlighted that Ghana’s programme with the International Monetary Fund (IMF) had passed successive reviews, resulting in an upgrade of the country’s sovereign credit rating from Selective Default to CCC+ by S\&P Global Ratings.

Dr. Asiama attributed the positive developments to strong monetary policy actions, including maintaining the monetary policy rate at 28 per cent, conducting active open market operations to manage liquidity, and enforcing discipline in the FX market through structured auctions and forward guidance. He also commended the Ministry of Finance for its fiscal consolidation efforts in line with the 2025 Budget and IMF benchmarks.

Despite the encouraging progress, the Governor warned that sustaining forex stability would require more deliberate effort than achieving it, noting that the country remained vulnerable to external shocks, particularly due to its dependence on a narrow commodity export base. He cited the ongoing Iran-Israel conflict and its impact on global gold prices as a reminder of such vulnerabilities.

He also identified behavioural risks, especially the widespread practice of dollarisation in sectors such as real estate, education, and luxury retail, where transactions are conducted in foreign currency despite operating entirely within the domestic economy. According to him, this practice undermines confidence in the Cedi and contravenes the country’s legal tender laws.

Dr. Asiama further cautioned that while a stronger Cedi improves inflation and import costs, prolonged appreciation could harm export competitiveness and slow industrial recovery. He said the Bank must therefore strike a careful balance between maintaining currency stability and supporting private sector credit growth.

To sustain the gains and ensure lasting transformation, the Governor outlined four priority areas. These include strengthening forex retention by incentivising exporters to reinvest locally through tax incentives and access to credit; diversifying the export base by promoting value addition in cocoa, gold, oil, and expanding non-traditional exports in ICT, creative industries, and services; improving FX market efficiency by expanding forward auctions and promoting hedging instruments such as swaps and forwards; and reinforcing Cedi dominance through the enforcement of legal tender laws and integration of the eCedi into the retail payment ecosystem.

Dr. Asiama announced that the Bank was finalising a regulatory framework for Virtual Asset Service Providers (VASPs) to bring cryptocurrency exchanges under formal supervision, in line with anti-money laundering and counter-terrorism financing regulations.

He stressed that while the central bank would continue to play its role through credible regulation and sound monetary policy, lasting forex stability required the active participation of the private sector. He urged businesses to anchor forex management into their corporate strategies, reinvest export proceeds in Ghana, and improve their internal risk management practices with regard to currency exposure.

Dr. Asiama also invited businesses to collaborate with the Bank of Ghana in sharing market insights, co-developing fintech solutions, and piloting innovations such as the eCedi to deepen financial inclusion and resilience.

“Macroeconomic stability is a public good. It benefits all, and thus demands the participation of all – regulators, banks, exporters, importers, investors, the media, and the public,” he said.

Commending Graphic Communications Group and Stanbic Bank for convening the forum, the Governor emphasised the need for continuous dialogue and collective action in shaping Ghana’s foreign exchange future.

“The Cedi is rising. Let us ensure that Ghana rises with it,” he concluded.