BoG injects $10bn into forex market to strengthen cedi

The Bank of Ghana (BoG) has injected about $10 billion into the foreign exchange market since January 2025 to help stabilise the cedi.

This amount represents the total dollars sold to commercial banks and businesses to meet their FX needs, a move that has played a major role in supporting the currency’s stability.

The intervention covers the period from January to the first week of December 2025.

Sources close to the central bank say the programme is intended to meet market demand for dollars, not just to defend the cedi.

The funds used for these interventions come from the BoG’s Domestic Gold Purchase Programme, which has benefited from higher global gold prices.

These gains have allowed the central bank to auction dollars without drawing down its international reserves.

Officials say the support plan was designed to ensure Ghana’s reserve build-up and debt repayment commitments remain intact.

Portions of the gold revenue have gone into reserve accumulation, upcoming debt payments, and dollar support for the market.

BoG data shows that Ghana’s international reserves stood at $9.1 billion in December 2024 and improved to $11.4 billion by October 2025, with strong expectations that reserves will close the year above $12 billion.

Analysts say this proves the interventions have not depleted reserves.

In October alone, the central bank injected $1.15 billion through its FX Intermediation Programme, using market-neutral, spot-based auctions.

Analysts believe these measures contributed to the cedi’s strong performance that month.

By the end of October 2025, the cedi had appreciated 13.9% against the dollar and 32.2% year-to-date.

In November, the BoG Board approved a new Foreign Exchange Operations Framework to clarify the goals and principles behind its FX activities.

The framework aligns with the Bank’s inflation-targeting regime and flexible exchange rate system.

Its three main objectives are to:

1. Support reserve build-up to protect against external risks.

2. Limit excessive short-term FX volatility by addressing disorderly market conditions without fixing the exchange rate.

3. Intermediate FX flows neutrally, using inflows from the Gold Purchase Programme and export surrender requirements.

This means the BoG will inject forex into the market in a transparent, orderly manner without trying to steer the exchange rate in a particular direction.

Future interventions, the Bank says, will follow a “structured discretion-under-constraint” approach focusing on correcting market failures rather than defending specific exchange rate levels.

“Reserve accumulation and FX intermediation will be carried out through transparent and well-communicated operations,” the central bank stated.