Prof. Turkson highlights BoG ‘game-changing’ role in stabilising cedi

Associate Professor of Economics, Professor Ebo Turkson, says Bank of Ghana policies in 2025 played a decisive role in stabilising the cedi.

Professor Turkson, who also serves on the Monetary Policy Committee of the Bank of Ghana, outlined key policy interventions he believes helped reset the economy during a one-on-one interview on TV3’s Key Points programme.

He pointed to sustained monetary tightening measures as a major factor, explaining that the Central Bank consistently reduced excess liquidity in the system.

“Since 2022, the Central Bank has conducted open market operations to take out the excess liquidity in the system,” he said, stressing that the timing of these measures proved critical.

According to him, the earlier years were marked by significant currency instability, with the cedi recording sharp losses.

“If you look at 2023 and 2024, we had a depreciation of almost 19% every year,” he noted, highlighting the scale of the challenge policymakers faced.

However, he described 2025 as a turning point, attributing the shift to a combination of reforms and strategic interventions.

“The stability of the cedi in 2025 was a game-changer,” he stated, emphasising how coordinated efforts began to yield results.

Professor Turkson explained that reforms in the foreign exchange market, alongside the domestic gold purchase programme, strengthened Ghana’s external position. He said the initiative enabled the Central Bank to build reserves and send positive signals to investors.

“The Central Bank was able to build part of its reserves in gold and improve its reserve buffers,” he said.

These developments, he added, contributed to a reversal in the cedi’s trajectory.

“The signal to the foreign exchange markets saw a situation where the currency began to appreciate,” he explained.

He further linked exchange rate stability to easing inflationary pressures, noting Ghana’s reliance on imports.

“With the appreciation of the currency, its impact on inflation was going to decline because we depend on imported goods,” he said.

Professor Turkson maintained that the combination of exchange rate stability, fiscal reforms, and monetary discipline under the current leadership has helped restore confidence in the economy and laid a stronger foundation for sustained recovery.