Cedi's Recent Gains to be Consolidated with New Reforms - BoG

Accra, Ghana - 22 May, 2025 - The Bank of Ghana is poised to deepen its reform efforts to solidify the cedi's recent surge, which has seen the currency appreciate by approximately 19% so far this year.

According to Governor Dr. Johnson Asiamah, the next phase of reforms will prioritize maintaining steady foreign exchange inflows and enhancing regulatory oversight in the forex market.

Dr. Asiamah attributed the cedi's strength to a combination of prudent monetary policy decisions and coordinated fiscal discipline. The currency's appreciation has, in turn, helped mitigate imported inflation pressures and bolster public confidence.

Nevertheless, he cautioned that the economy still faces significant challenges, including exposure to external shocks, food supply constraints, and geopolitical tensions.

“Importantly, the cedi has appreciated sharply by nearly 19 percent between April and May, helping to ease imported inflation pressures and restore public confidence. The appreciation reflects a combination of factors, including prudent monetary policy, improved market sentiment and external sector gains, he said.

“However, significant challenges persist. The inflation outlook, while improving, remains vulnerable to second-round effects, food supply constraints, especially from northern Ghana and the Sahel and external price shocks, particularly given volatile global commodity markets.”

“Geopolitical tensions and evolving global trade dynamics, including the recent US-led tariff disputes, have heightened market uncertainty and could affect commodity prices, exchange rates, and financial flows in emerging markets like ours”, he added.

As the Monetary Policy Committee (MPC) convenes to review the policy rate, market expectations lean towards a possible retention to support lending rates and economic recovery.

In March, the Committee increased the policy rate by 100 basis points to 28% in a bid to anchor inflation expectations. 

The outcome of the MPC's deliberations, set to be announced on May 23, 2025, will be closely watched for its implications on Ghana's economic stability and growth.

Source: Lead News Online