Watch market, take policy action, beef-up exports to consolidate cedi gains – Prof. Gatsi

From May 2024 to April 2025, the Bank of Ghana added 8.9 tonnes of gold. This is a 40.6% increase in its gold reserves. The total gold reserves rose from 22.3 tonnes to 31.2 tonnes.

During the same period, Ghana exported 30,479.5 kg of gold worth US$2.7 billion. This is a significant rise from US$862.4 million last year.

Initiatives like Gold for Reserves and Gold for Oil boosted reserves. Fiscal reforms under the IMF program also helped improve fiscal credibility. The suspension of external debt servicing eased pressure on foreign reserves.

Prof. Gatsi emphasized the need for continued fiscal discipline in spending control. He praised the Bank of Ghana's tight monetary policy as crucial for recent gains.

On March 28, 2025, the Monetary Policy Committee raised the policy rate by 100 basis points to 28%. In April, the central bank injected US$490 million into the forex market to support currency stability.

The cedi appreciated about 16% against the dollar recently, according to Bloomberg data. It was named 'best performing currency in May' by Bloomberg.

Currently, on the interbank market, the cedi trades at GH¢12.22 to US$1 and GH¢16.32 to £1.

Finance Minister Dr. Cassiel Ato Forson attributed this positive trend to sound economic planning and strategic interventions.

He stated that this stability is not a quick reaction but careful planning.

However, questions remain about how sustainable these gains are over time.

Prof. Gatsi noted that continuous appreciation of the cedi isn't feasible long-term. He stressed that achieving a stable exchange rate is essential for economic health.

He suggested aiming for a stable rate around GH¢10 to US$1 for predictability in business planning.

Experts link recent cedi appreciation partly to global economic shifts affecting currencies worldwide.

However, Prof Gatsi argued that internal policies must be strong enough to leverage global changes effectively.

Gold and cocoa are Ghana’s major exports, making up over half of total exports in 2024.

Their combined export value reached GH¢215.57 billion out of GH¢250.2 billion total exports this year.

Rising prices for gold and cocoa will positively impact foreign exchange inflows as well.

Gold prices hit US$3,222 per ounce while cocoa reached US$10,906 per tonne according to Reuters data.

Inflation has decreased for four consecutive months since December's peak at 23.8%. It fell significantly to 21.2% by April 2025 with projections dropping further by World Bank estimates.

Despite being above Ghana’s IMF target of 15%, government aims for an inflation rate of