Ghana Deployed Nearly US$4 Billion in Forex Interventions to Support Cedi — World Bank
Ghana has deployed almost US$4 billion in foreign exchange interventions between late 2024 and mid-2025 in a bid to stabilize the cedi, according to the 2025 Policy Notes by the World Bank. The interventions, executed by the Bank of Ghana through ad hoc foreign exchange market operations, were intended to provide liquidity and curb volatility in the currency market.
What the interventions involved
- The Policy Notes indicate that from October 2024 to May 2025, the cumulative magnitude of foreign exchange support operations reached nearly USD 4 billion.
- According to the IMF review, these interventions included ad hoc sales of foreign reserves to smooth exchange pressures.
- Such measures aimed to suppress excessive depreciation, reduce exchange rate volatility, and bolster confidence in the domestic currency.
Impact on the cedi and external buffers
- The cedi has experienced periods of relative strength in early 2025: for instance, analysts note an approximate 10.5% appreciation from late 2024 to May 2025.
- Contributing to the improved external position, Ghana’s gold exports rose sharply in 2024, helping generate trade surpluses and boosting foreign exchange inflows.
- The accumulation of foreign assets and elevated reserves gave the central bank greater capacity to intervene in FX markets.
Risks & challenges ahead
- Such large-scale reserve interventions reduce the buffer available against external shocks, meaning any reversal in capital flows or global conditions could test the country’s resilience.
- Sustaining currency stability demands strict coordination of monetary and fiscal policies. Loose fiscal policy or high deficits could undermine the efforts.
- The cedi’s gains are also sensitive to commodity prices—especially gold, which has been a major source of forex inflows.
What it means for Ghanaians
- A more stable currency can ease inflationary pressures, particularly on imported goods, and reduce the cost burden for businesses reliant on foreign inputs.
- But if reserves are depleted or investor confidence falters, renewed depreciation could follow, affecting households, firms, and the cost of foreign-denominated debt.
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