'Cedi’s stability against US dollar will be sustained' says BoG Governor

Bank of Ghana Governor Dr. Johnson Asiama says the cedi's volatility is ending.

He spoke to Joy Business during the IMF/World Bank Spring Meetings in Washington D.C. Dr. Asiama assured that the central bank will maintain the cedi's current stability against the dollar.

“We have enough reserves to support this stability,” he stated.

However, he clarified that the Bank of Ghana will not fix exchange rates. The cedi must float as an endogenous variable, but excessive volatility should be avoided.

Reasons Behind the Cedi’s Stability

The Ghana cedi has been stable against the US dollar recently. Since December 2024, it has even appreciated on some days.

As of April 2025, data shows that the cedi appreciated by 2.76 percent against the dollar. Most commercial banks were selling dollars at GH¢15.58 as of April 28, with some quoting GH¢15.40.

Market analysts attribute this stability to several factors. These include liquidity support from the central bank and BoG’s Gold Purchase Programme, which boosts confidence and reduces speculation.

The International Monetary Fund (IMF) noted Ghana's strong international reserve buildup too. By February 2025, reserves reached $9.3 billion, exceeding targets set under the IMF’s Extended Credit Facility programme.

Governor’s Perspective on Cedi Performance

Dr. Asiama outlined key reasons for this currency stability:

1. Improved external sector performance due to strong remittances.
2. Better earnings from gold and cocoa exports.
3. Effective coordination between fiscal and monetary policy strengthens economic fundamentals.
4. Weaker US dollar performance globally benefits the cedi.

He emphasized that fiscal measures support monetary actions to maintain development.

Impact of IMF Programme

Dr. Asiama noted that a recent Staff Level Agreement with the IMF boosted investor confidence.

“The agreement was a stamp of approval for government efforts,” he explained.

Discipline in both fiscal and monetary policies helps reset market expectations and restore confidence.

Impact on Inflation

Dr. Asiama is optimistic about further slowing inflation due to improved cedi performance.

“This should be supported by monetary measures from the Bank of Ghana,” he stated, aiming to drive inflation lower.