Bank of Ghana has no target rate for cedi appreciation - Governor Asiama

Governor of the Bank of Ghana, Dr. Johnson Asiama, spoke at a press conference. He said the Central Bank does not have a specific target for cedi appreciation.

After the Monetary Policy Committee (MPC) meeting, he explained their stance. “We don’t have a plan that says when the cedi reaches a point, we must ease appreciation,” he stated.

Dr. Asiama noted that while they are concerned about excessive depreciation, there is no set target rate to defend. “We don’t keep a target rate that we want to defend aggressively,” he added.

He addressed market speculation, saying, “People are speculating out there. But remember, you haven’t heard the Bank of Ghana playing in that space.” He assured that they will manage volatility effectively.

The Governor emphasized monitoring broader exchange rate dynamics. He mentioned the importance of keeping swings from becoming excessive.

Cedi Appreciation and Market Sentiments

Dr. Asiama dismissed claims that cedi appreciation is due to depleted reserves. He stated it is influenced by strong reserves and robust monetary policies.

“Market sentiments are now playing a significant role in the cedi’s sustained appreciation,” he observed.

According to data released on May 22, 2025, the cedi has appreciated by 24.1% against the US dollar. Ghana’s international reserves were $10.6 billion at the end of April 2025.

When asked why currency strength hasn’t lowered market prices, he urged patience. “It’s just a matter of time,” he said.

Inflation Outlook

The Bank of Ghana aims for an end-of-year inflation target of 12% for 2025. Dr. Asiama believes this goal is achievable despite external threats.

“I don’t think the end-of-year target is ambitious,” he stated confidently.

He also expressed optimism about returning to single-digit inflation by early 2026.

Cash Reserve Ratio and Private Sector Credit

The Bank maintained its policy rate at 28 percent and revised the Cash Reserve Ratio as well.

Dr. Asiama explained banks will maintain reserves in their respective currencies now—foreign currency for foreign deposits and domestic currency for local deposits.

He noted signs of recovery in private sector credit with decreasing Ghana Reference Rates. Analysts expect this change will increase lending opportunities soon.

International Reserves Position

Ghana's international reserves stand at $10.6 billion, covering about 4.7 months of imports.

Dr. Asiama clarified there is no upper limit target for reserves currently but mentioned a lower limit of three months’ import cover exists.

“What we have now is adequate and ensures our external resilience,” he assured regarding future debt obligations.