Credit: Kekeli K. Blamey
Pressure is intensifying on the Bank of Ghana (BoG) and the government over their handling of the cedi, as both the International Monetary Fund (IMF) and local economic think tank, the Institute of Economic and Research Policy Promotion (IERPP), raise red flags about the country’s forex intervention practices.
In its fourth review under Ghana’s Extended Credit Facility programme, the IMF expressed deep concern about the BoG’s persistent interference in the foreign exchange market, urging the central bank to adopt a more rules-based approach and reduce direct interventions.
“The Bank of Ghana should… reduce its footprint in the foreign exchange market, and allow for greater exchange rate flexibility,” the IMF said, adding that such a move was necessary to ensure long-term macroeconomic stability.
This critique aligns with long-standing concerns raised by the IERPP, which now says the IMF’s comments underscore the urgent need for a clear and transparent FX intervention policy. In a statement signed by its Executive Director, Prof. Isaac Boadi, the IERPP pointed out that despite repeated calls for reform, the BoG’s operations remain “ad hoc and opaque,” fueling speculation and undermining investor confidence.
“The government’s deliberate injection of large dollar volumes into the system to artificially stabilise the cedi may appear effective in the short term, but it is a dangerous distortion of market forces,” the IERPP warned. “This tactic encourages imports at the expense of domestic production and ultimately weakens the economy’s fundamentals.”
Experts say the absence of a formal FX intervention framework not only creates uncertainty but also limits the ability of market actors to make informed decisions. Both the IMF and IERPP are urging policymakers to prioritise transparency, publish a structured intervention strategy, and let the cedi reflect real economic conditions.
Critics argue that continued disregard for such advice could exacerbate existing vulnerabilities and erode the credibility of Ghana’s monetary policy architecture.
