The Bank of Ghana (BoG) has significantly reduced both the scale and frequency of its foreign exchange (forex) market interventions, following cautionary advice from the International Monetary Fund (IMF) earlier this year.
In the second quarter of 2025, the central bank had injected over US$2 billion into the forex market, a level the IMF warned was unsustainable. Officials were urged to moderate activity to protect reserves and maintain market stability.
By the end of July 2025, BoG’s forex forward sales dropped to US$822.8 million, a 53.6% decline from June, reflecting a deliberate shift toward a more measured approach. The central bank notably abstained from the market on July 25 and 29, marking its first absences since April.
The tightening of forex supply contributed to a 1.7% depreciation of the cedi against the US dollar, coinciding with the IMF Board’s approval of Ghana’s latest programme review. Analysts at IC Research suggest the move aims to prevent prolonged overvaluation and reduce arbitrage opportunities between interbank and retail rates.
“Ghana’s sharp real exchange rate appreciation in the first half of 2025 created multiple forex rates, with the interbank rate around mid-GH¢10/USD and retail rates closer to GH¢12/USD,” IC Research noted. The firm projects a gradual depreciation, expecting the interbank rate to settle between GH¢10.45 and GH¢11.45/USD by the end of 2025, with a midpoint of GH¢10.95/USD.
The report highlighted a 31.3% decline in the Real Effective Exchange Rate (REER) index within six months to 92.7 points by June, signaling a likely corrective depreciation, though it is expected to remain moderate.
BoG’s recalibrated strategy underscores the balancing act it faces: maintaining currency stability while adhering to IMF guidance and ensuring sustainable reserves management.
