Business News

Bank of Ghana Denies Dollar Injection to Stabilize Cedi, Cites Structural Reforms

 

The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has refuted claims that the central bank has been injecting significant amounts of US dollars into the foreign exchange market to stabilize the Ghanaian cedi. According to him, the cedi’s recent stability and marginal appreciation against the US dollar result from strategic reforms and robust foreign inflows rather than market intervention.

Dr. Asiama explained that the cedi’s current trajectory reflects structural improvements rather than reliance on reserves.

“The stability you’re witnessing isn’t due to our intervention in the market or selling off reserves,” he emphasized. “On the contrary, our reserves programme is strengthening. We’re consistently building more reserves daily, fueled by a surge in foreign inflows.”

Dr. Asiama attributed the cedi’s resilience to targeted reforms in the foreign exchange market, which have streamlined operations and bolstered confidence. “It’s a culmination of these measures that has anchored the cedi’s performance,” he said.

The Governor clarified the BoG’s broader approach to currency stability, noting that stability does not imply fixing the cedi’s value or encouraging over-appreciation. He acknowledged that an overvalued currency could harm exports, emphasizing that the cedi’s alignment must reflect economic fundamentals.

“When we talk about stability, it means ensuring the cedi remains within a reasonable range consistent with macroeconomic stability,” Dr. Asiama explained. “Our focus is to avoid misalignment in real terms, keeping the currency within an appropriate band that supports economic growth and resilience.”

Dr. Asiama was optimistic about the cedi’s future, stating, “The era of excessive volatility for the cedi is coming to an end. As long as we maintain this path of reforms and prudent management, we can expect sustained stability.”

The Ghanaian cedi has witnessed remarkable stability since December 2024, with slight appreciation in recent days, marking one of the most sustained periods of economic confidence in recent years.

Story by: Mercy Addai Turkson #ahotoronline.com

 

Show More

Related Articles

Leave a Reply

Back to top button