BY Nadia Ntiamoah
The foreign exchange markets have experienced one of the most aggressive central bank interventions in recent history, with the Bank of Ghana (BoG) confirming that it has injected an estimated $10 billion into the system between January and early December 2025.
The move, according to senior central bank sources, was aimed at meeting surging dollar demand from banks and businesses while cushioning the economy against severe exchange rate volatility.
But this intervention, described by analysts as one of the largest market support operations since the 2014–2016 currency crisis, has raised important questions about sustainability, strategy, and the long-term health of the cedi.
The struggle with currency depreciation dates back several years, compounded by structural weaknesses, heavy import dependency, dwindling exports, and periodic fiscal slippages.
By 2022–2023, the cedi had experienced one of its worst depreciations on record, losing nearly half its value as inflation soared and the country entered an IMF programme.
To reverse the trend, the BoG launched the Domestic Gold Purchase Programme in 2022, an initiative designed to reduce reliance on dollar purchases for fuel imports and increase gold-backed reserves.
As gold prices surged globally between 2024 and 2025, the programme began generating significant revenue windfalls—funds the central bank has now channelled into stabilising the cedi.
How the $10bn Was Pumped Into The Market
BoG insiders confirmed that the bulk of the $10 billion was sold through forex auctions to commercial banks and major businesses struggling to secure dollars.
Officials insist the intervention was not a desperate defence of the cedi, but a strategic response to genuine market demand that threatened to disrupt imports and fuel pricing.
Crucially, the BoG emphasises that the support did not drain the reserves.
Instead, proceeds from the high-performing gold programme were allocated across three main areas: Reserve accumulation, debt repayments, and dollar support to the market through auctions.
The Central Bank’s economic data paints a positive picture. The foreign reserves, which stood at $9.1 billion at the end of 2024, surged to $11.4 billion by October 2025, with projections suggesting reserves could cross the $12 billion threshold by year-end.
Analysts say this demonstrates that the $10 billion injection did not weaken Ghana’s reserve position.
One of the most dramatic results came in October 2025, when the BoG injected $1.15 billion under its FX Intermediation Programme.
That month witnessed a historic turnaround for the cedi, which appreciated sharply against major trading currencies.
By the end of October 2025:
The cedi had appreciated 13.9% against the dollar.
Year-to-date appreciation reached 32.2%, one of the strongest performances recorded in decades.
Economists attribute the performance to both BoG’s aggressive interventions and favourable external conditions, including stronger gold exports and subdued demand for dollars in the international market.
BoG Introduces A New FX Operations Framework
Amid concerns about the scale of interventions, the Bank of Ghana introduced a new Foreign Exchange Operations (FX) Framework in November 2025.
According to the central bank, the framework defines its operational boundaries and outlines a more transparent approach to future forex management.
The new framework focuses on three core goals:
1. Reserve accumulation to guard against external shocks.
2. Reducing excessive short-term volatility without attempting to fix exchange rates.
3. Market-neutral FX intermediation, using inflows from the gold programme and export surrender requirements.
BoG says interventions will follow a “structured discretion under constraint” model—meaning it will intervene only to correct market failures, not to chase specific exchange rate targets.
This approach also acknowledges the absence of hedging tools in the Ghanaian financial market, which exposes businesses to currency-related risks.
