Ghana’s currency, the cedi, has staged a strong rebound, appreciating nearly 19% between April and May—a development the Bank of Ghana (BoG) attributes to renewed market confidence and firm monetary policy actions.
Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, speaking at the 124th Monetary Policy Committee (MPC) meeting in Accra, said the appreciation reflects improving macroeconomic fundamentals, a stable exchange rate environment, and prudent policy responses.
“The cedi’s recovery—from GH¢15.53 to GH¢13.09 per US dollar in just two months—is underpinned by increased investor confidence, tighter monetary policy, and favorable external developments,” he explained.
The central bank’s recent decision to raise the policy rate to 28% in March has played a significant role in curbing inflation, which dropped to 21.2% last month. Dr. Asiama noted that easing non-food inflation and reduced pressure from imports due to the stronger currency have also contributed to the downward inflation trend.
“This monetary action has helped temper inflation momentum while restoring public trust in the economic direction,” the governor said.
Positive signals from global partners have reinforced optimism. Dr. Asiama pointed to Ghana’s recent staff-level agreement with the International Monetary Fund (IMF) on the fourth review of its Extended Credit Facility programme and S\&P’s credit rating upgrade to CCC+ as affirmations of progress.
However, he cautioned that the economic recovery remains vulnerable. Global uncertainties, geopolitical tensions, and domestic food supply challenges still pose significant risks to the disinflation process.
To further bolster monetary stability, Dr. Asiama announced a review of the bank’s liquidity management strategy. This includes reducing reliance on unremunerated cash reserve ratios and transitioning toward active open market operations with longer-tenor instruments, aimed at enhancing credit flow and economic resilience.
As the Monetary Policy Committee weighs its next move, the governor emphasized the need for policy consistency to maintain disinflation without jeopardizing growth.
“Our credibility as a central bank depends on our ability to respond decisively to shifting economic realities. It’s a delicate balancing act—but one we must get right,” he concluded.
