If global dynamics change, domestic policy stance is strong enough to cushion the Cedi – Asiama

Concerns raised about the stability of the Cedi are understandable, the Governor of the Bank of Ghana (BoG), Dr Johnson Asiama, has said.

Dr Asiama assured that Ghana’s domestic policy stance is strong enough to cushion such shifts.

Speaking at a Private Investor Roundtable, at the ongoing African Development Bank (AfDB) Annual Meetings in Abidjan on Wednesday, May 28, he explained that as of May 20, 2025, the Ghana cedi has appreciated by 21.5% year-to-date — a remarkable reversal from the 19.2% depreciation experienced in 2024. But this appreciation is not speculative, not artificial, and not temporary.

“It is grounded in fundamentals,” he said.

Highlighting a few key drivers, Dr Asiama mentioned robust foreign exchange inflows from exports, particularly gold, which has surged to over US$3,200/oz due to global uncertainty; the Gold-for-Reserve programme, which he said has enhanced BoG’s ability to accumulate reserves while reducing pressure on open-market dollar purchases’; a current account surplus of US$2.12 billion in first quarter 2025, and strong net reserve accumulation — now at US$10.67 billion; Stable remittance flows, supported by structural reforms and improved transfer systems, even as external risks like a proposed U.S. remittance tax and slowing global growth loom.

“Even as we remain vigilant, we believe the cedi is entering a new phase of anchored stability. Yes, global dynamics including a possible rebound in the U.S. dollar or an easing of gold prices could soften external support. But Ghana’s domestic policy stance is strong enough to cushion such shifts,” he assured.

He further pointed out that inflation is declining, reserves are rising, fiscal policy is tightening, and real sector growth is holding steady.

These are the fundamentals that give currency markets direction and they are now moving in Ghana’s favour, he said.

“We are also enforcing foreign exchange market regulations more rigorously. The days of unmonitored FX transactions, speculative arbitrage, and opaque flows are behind us. We are building a market where FX pricing is fair, flows are transparent, and capital is respected.

“To those still holding dollars in anticipation of a return to old patterns of depreciation, I will say this plainly: The market has changed. The narrative has changed. And the policy environment has changed.

“The cedi’s performance is not an illusion; it is a reflection of real reforms, real discipline, and real resilience,” Dr Asiama stressed.

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