BoG Reaffirms Commitment to Flexible Exchange Rate Regime Anchored in Market Fundamentals
Ghana’s central bank has ruled out any return to a fixed exchange rate system, reiterating its commitment to a flexible regime anchored in market fundamentals, as the local currency continues to stabilise following a prolonged period of volatility.
Speaking at a banking sector dialogue in Accra on Tuesday, Governor of the Bank of Ghana, Dr. Johnson P. Asiama, said the Central Bank was not operating within a rigid currency band nor engaging in artificial market interventions. He stressed that the cedi’s recent performance was underpinned by improved macroeconomic fundamentals and market-oriented policy tools.
“Let me be clear: we are not pursuing a rigid exchange rate target or a predetermined band,” Dr. Asiama said at the Banking the Last Mile event, organised by the Ghana Association of Banks in partnership with Absa Bank Ghana. “The Bank of Ghana remains committed to a flexible exchange rate regime, one that is anchored in fundamentals, responsive to shocks, and supported by credible policy tools.”
His comments come amid growing scrutiny of Ghana’s monetary framework as the cedi posts relative stability against the US dollar, following a sharp depreciation in 2022 and early 2023 which prompted the country to seek an IMF bailout. The cedi’s year-to-date performance has been bolstered by disinflation, improved external flows, and a tightening monetary stance.
Rejecting suggestions of unofficial currency pegs, the Governor said recent gains reflect the Central Bank’s deliberate pivot to more disciplined FX management and fiscal consolidation under an IMF-supported programme.
“The recent stability of the exchange rate is not accidental, nor is it the result of artificial interventions,” he said. “Rather, it reflects the cumulative impact of sound monetary policy, enhanced transparency in the foreign exchange market, and improved external sector fundamentals.”
He cited several reforms underpinning this approach, including an expanded FX auction framework, stricter alignment of FX demand with trade-related activity, and reduced reliance on direct intervention using reserves.
“These measures have curtailed speculative pressures and ensured that foreign exchange flows reflect legitimate trade, investment, and remittance activity,” he added.
Ghana’s US$3 billion IMF programme, approved in 2023, has sought to anchor investor sentiment and restore macroeconomic stability after a sovereign default. According to Dr. Asiama, reforms under the programme are beginning to yield tangible results.
“The macro-fiscal adjustment is yielding results,” he noted. “Fiscal discipline is restoring credibility, and external financing flows have improved. Combined with sustained disinflation, positive real interest rates, and resilient export and remittance inflows, these developments have anchored expectations and restored confidence in the currency’s value.”
Analysts say the Central Bank’s emphasis on exchange rate flexibility is critical in maintaining policy credibility, particularly as Ghana seeks to rebuild external buffers and attract new foreign investment in the post-debt-restructuring phase.
While the cedi remains susceptible to external shocks and global liquidity conditions, the BoG’s strategy signals a measured but firm commitment to market-determined exchange rate dynamics—an approach aligned with IMF policy prescriptions and global investor expectations.
