Concerns about the stability of the Ghanaian cedi are understandable, but the Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama remains optimistic. Speaking at a Private Investor Roundtable during the African Development Bank (AfDB) Annual Meetings in Abidjan on Wednesday, May 28, he assured stakeholders that Ghana’s robust domestic policy framework is well-positioned to mitigate external shocks.
Dr. Asiama revealed that as of May 20, 2025, the Ghana cedi has recorded an impressive 21.5% year-to-date appreciation, a significant turnaround from the 19.2% depreciation it experienced in 2024. “This appreciation is neither speculative, artificial, nor temporary,” he emphasized. “It is firmly grounded in economic fundamentals.”
Key Drivers of Stability
Dr. Asiama identified several factors underpinning the cedi’s remarkable performance:
1. Strong Export Earnings: Ghana has benefited from robust foreign exchange inflows, particularly from gold exports. The price of gold has surged to over US$3,200/oz amid global uncertainties, bolstering the nation’s revenue.
2. Gold-for-Reserve Programme: This initiative has enhanced the BoG’s capacity to accumulate reserves while alleviating pressure on open-market dollar purchases.
3. Current Account Surplus: Ghana recorded a surplus of US$2.12 billion in the first quarter of 2025, reflecting a positive balance of trade and robust economic activity.
4. Resilient Net Reserves: The country’s net reserves now stand at US$10.67 billion, providing a strong buffer against external shocks.
5. Stable Remittances: Despite global challenges, including a proposed U.S. remittance tax and slowing global growth, Ghana has maintained stable remittance flows, supported by structural reforms and improved transfer systems.
Anchored Stability
Dr. Asiama projected confidence in the cedi’s trajectory, noting that inflation is declining, reserves are rising, fiscal policy is tightening, and real sector growth remains steady. These developments, he explained, are shifting the dynamics of Ghana’s currency markets in a favourable direction.
“Even as we remain vigilant to global risks, including a potential rebound in the U.S. dollar or easing gold prices, Ghana’s domestic policy stance provides a strong cushion,” he assured.
Market Discipline and Reform
The BoG Governor also highlighted reforms in the foreign exchange market aimed at fostering transparency and stability.
“We are rigorously enforcing foreign exchange market regulations,” Dr. Asiama declared. “The era of unmonitored FX transactions, speculative arbitrage, and opaque flows is over. We are building a market characterized by fair pricing, transparent flows, and respect for capital.”
To those speculating on a return to old patterns of depreciation, he issued a clear message: “The market has changed
Story by: Mercy Addai Turkson #ahotoronline.com
