By: Kenneth Appiah Bani
The Bank of Ghana (BoG) has scaled back its interventions in the foreign exchange market following concerns raised by the International Monetary Fund (IMF), sparking fresh volatility in the cedi’s performance.
In the first half of 2025, the local currency experienced a sharp appreciation, but this has now given way to the emergence of multiple exchange rates. While the interbank market currently hovers around GH¢10.00 to the US dollar, some retail forex traders are quoting as high as GH¢12.00, creating a widening arbitrage gap.
Analysts warn that this discrepancy, coupled with tightening forex liquidity, could complicate market stability in the coming months.
BoG data shows that in the second quarter of 2025, the central bank injected more than US$2 billion into the market to cushion the cedi. However, interventions slowed in July, with forward sales falling sharply to US$822.8 million a 53% decline from June. Notably, the Bank stayed out of the forex market on two trading days in July, the first such pause since April. This reduction in supply has increased pressure on the cedi, which has depreciated by 1.7% against the US dollar on the interbank market since Ghana secured IMF Board approval in June.
Market watchers, including analysts at IC Research, say the BoG’s gradual pullback is a deliberate move aimed at correcting misalignments in the foreign exchange market and narrowing arbitrage opportunities. They predict that the interbank rate will see a moderate uptick, with the cedi expected to trade between GH¢10.45 and GH¢11.45 to the dollar by the end of 2025.
The development highlights the delicate balance the central bank must strike between managing exchange rate volatility and adhering to IMF programme conditions, as Ghana works to stabilise its economy under the ongoing bailout.
