The Governor of the Bank of Ghana (BoG), Dr. Johnson Asiama, has indicated that the Central Bank does not have any specific target rate for the appreciation of the cedi.
“We don’t have such a plan on the table that says when the cedi reaches a certain point, we must move to ease the appreciation,” Dr. Asiama stated.
Speaking at a news conference after the Monetary Policy Committee (MPC) meeting to review recent economic developments, the BoG Governor explained that while the central bank is concerned about excessive currency depreciation, it does not maintain a specific appreciation target.
“As much as we don’t want to see the Ghana cedi depreciate excessively, we don’t keep a target rate that we want to defend aggressively,” he further explained.
Speaking on the ongoing speculation on the markets, Dr. Asiama noted, “People are out there with all sorts of speculations, but remember you haven’t heard the Bank of Ghana playing in that space. We will ensure that volatilities do not become excessive.”
According to him, the BoG is monitoring broader exchange rate dynamics, especially the real effective exchange rate.
“You may see some swings, but our focus is to ensure that they are not excessive,” he assured.
Cedi appreciation, market sentiments
The Governor also dismissed suggestions that the cedi’s appreciation is being propped up by the depletion of reserves.
“What we are witnessing with the Ghana cedi is influenced by strong reserves, robust monetary policy measures, and favourable market sentiments based on actions taken on both the monetary and fiscal fronts,” he said.
He added that market perception was playing an increasingly important role. “We believe that market sentiments are now playing a significant role in the cedi’s sustained appreciation,” he observed.
According to economic and financial data released by the Bank on May 22, 2025, the cedi has appreciated by 24.1% against the US dollar.
Ghana’s international reserves stood at $10.6 billion at the end of April 2025.
Responding to concerns that the currency’s strength has not translated into lower market prices, the Governor urged patience.
“It’s just a matter of time. We also believe that competition may play a significant role in the coming weeks, forcing traders to respond to current market developments,” he noted.
Inflation Outlook
The Bank of Ghana has set an end-of-year inflation target of 12% for 2025. Dr. Asiama is confident this is within reach despite ongoing external threats.
“I don’t think the end-of-year target is ambitious, looking at the policy measures we have undertaken,” he said.
He added that the Bank is optimistic Ghana could return to single-digit inflation by the first quarter of 2026.
“Looking at current developments and the policy measures in place, we should be able to manage any external developments that could reverse the current disinflation trend,” he said.
Cash reserve ratio and private sector credit
The Bank of Ghana, which maintained the policy rate at 28 percent, also announced a revision to the Cash Reserve Ratio.
Dr. Asiama explained that “all banks will now maintain their reserves in their respective currencies. That means foreign currency reserves for foreign currency deposits and domestic currency reserves for domestic currency deposits.”
The Bank also noted signs of recovery in private sector credit. “When you look at the Ghana Reference Rate, it has been dropping. We will continue with current measures to sustain this decline,” the Governor stated.
Some industry analysts expect this move to free up more lending for the private sector in the coming months.
International reserves
Ghana’s international reserves are currently at $10.6 billion, covering approximately 4.7 months of imports.
While there have been questions about the Bank’s reserve targets, Dr. Asiama clarified: “There is no upper limit target for now, but we do have what you can call a lower limit of three months of import cover.”
He added, “What we have now is adequate and ensures our external resilience.”
Dr. Asiama was confident about whether the current reserves were sufficient to handle future debt obligations.
“We have everything programmed. What we have now is pretty adequate,” he assured.
