The Bank of Ghana (BoG) is intensifying efforts to make the country’s foreign exchange market more transparent and efficient through a revamped Foreign Exchange Market Intermediation Programme, which is set to deliver a $1 billion liquidity boost in November.
Under the new framework, the Central Bank will conduct twice-weekly spot auctions, selling about $300 million per session to licensed commercial banks. The initiative marks a continuation of reforms designed to enhance price discovery, promote fair competition among banks, and stabilise the cedi.
In a notice to market participants sighted by JoyBusiness, the BoG indicated that future auction volumes will be adjusted based on market conditions, reflecting a more flexible, data-driven approach to exchange rate management.
“The Bank remains firmly committed to transparency in its operations and will continue to disclose all relevant information regarding its foreign exchange activities, including FX intermediation and intervention,” the notice read.
Shift to Market-Neutral Operations
The new auction format follows a successful pilot in October, during which the BoG injected $1.15 billion in what it described as a market-neutral operation. Analysts credit the exercise for the cedi’s record appreciation — a 13.9% gain in October alone and 34.86% year-to-date, according to Central Bank data.
Average daily trading volume on the interbank market reached $22 million, contributing to a total of $484 million in monthly transactions.
Commercial banks and analysts have welcomed the BoG’s reforms, saying the shift from weekly allocations to spot auctions has enhanced market efficiency and improved liquidity visibility for dealers.
The Ghana Association of Banks noted that the spot-based approach provides more accurate market pricing and allows banks to plan their foreign exchange positions better.
A Reform-Driven Approach
The move is part of broader reforms linked to the Domestic Gold Purchase Programme, which allows the BoG to leverage gold reserves to strengthen the cedi and support foreign exchange liquidity.
At a recent engagement with banks, BoG Governor Dr. Johnson Asiama reaffirmed that the goal is not to fix the exchange rate but to smooth market volatility through transparent and competitive mechanisms.
“Monthly auction volumes may be adjusted depending on evolving market conditions, but our overarching objective remains clear: to deepen the interbank FX market, enhance price discovery, and smooth volatility,” he said.
Analysts Applaud Transparency Drive
Market watchers believe the Central Bank’s clear communication and adherence to open-market principles are helping rebuild confidence in Ghana’s forex system.
By allowing banks to access dollars on equal terms, the BoG is sending a strong signal that policy consistency and transparency will anchor the cedi’s strength in the months ahead.
