BY Issah Olegor
President John Dramani Mahama has confirmed that the Bank of Ghana (BoG) has pulled back from its active interventions in the foreign exchange market, leaving the cedi to find its “true value” in response to market forces.
His comments, delivered during his first presidential media encounter on September 10, 2025, have sparked both economic debate and political criticism over what some see as inconsistencies in his explanations about the cedi’s recent performance.
The International Monetary Fund (IMF) had asked the Bank of Ghana to desist from interfering in the foreign exchange market. Over $4billion was pumped to into the forex market to shore up the cedi, according to the IMF.
BoG Withdrawal And Market Reactions
The President disclosed that the central bank had initially intervened heavily to curb sharp volatility in the exchange rate.
These interventions temporarily boosted the cedi, but John Mahama admitted that the rapid appreciation triggered unintended consequences.
Cheaper dollars encouraged importers to flood the market with goods, while exporters, receiving fewer cedis for their products, became increasingly dissatisfied.
“We must strike a balance,” Mahama said, stressing that government aims to maintain depreciation within a controlled band of about 5% annually.
“The cedi is making an adjustment, and I believe it will settle at a certain rate.”
Complications From Appreciation and Decline
The cedi’s swings have created uncertainty across sectors.
John Mahama recalled that in 2024, the local currency suffered a 25% depreciation in the first half of the year, complicating planning for businesses.
More recently, its sharp appreciation discouraged diaspora remittances, which dropped by 50% as Ghanaians abroad delayed transfers, anticipating the cedi would eventually weaken again.
“There was one occasion when people asked if the cedi would go below ¢10,” Mahama noted. “It was undervalued at ¢16 and probably overvalued at ¢10. Somewhere in between lies the real value.”
Questionable Forex Practices and Sanctions
Beyond market forces, Mahama raised alarms over alleged abuses in the foreign exchange system.
According to him, money transfer companies were withholding dollars abroad, while some importers secured forex from commercial banks but failed to bring in goods.
“For four years, about $42 billion left the country without the corresponding imports,” the President disclosed, adding that sanctions had already been imposed on some banks, with individuals set to face investigations.
He insisted that protecting the integrity of the cedi was critical to national stability.
The GoldBod Contradiction
While Mahama’s latest explanation places emphasis on the BoG’s interventions, critics have pointed to inconsistencies in his messaging.
Barely two months earlier, in July 2025, the President attributed the cedi’s stability to the operations of GoldBod, Ghana’s gold-backed reserves management scheme.
“It is GoldBod that has made the cedi an abranteɛ now,” he said at the time, praising the policy as a cornerstone of his government’s economic strategy.
This shift in narrative has drawn criticism from political opponents and sections of the public, who accuse the President of inconsistency.
“A few weeks ago, you forcefully indicated that the Ghanaian cedi owed its strength to GoldBod,” one critic argued. “Why have you changed your mouth today? Which are we to believe?”
Broader Economic Concerns
The controversy comes at a sensitive time for Ghana’s economy, which has battled fluctuating exchange rates, rising import costs, and reduced external inflows since 2024.
Although Mahama has promised prudent management to keep the cedi stable, sceptics argue that contradictory explanations risk undermining public confidence in government policy.
For now, the withdrawal of the BoG from the forex market is expected to test the resilience of the cedi in a free-floating environment.
Whether GoldBod, central bank policies, or other macroeconomic factors can sustain stability remains to be seen.
