Cedi should be trading at GH₵8 after BOG’s forex interventions – Minority
The Minority in Parliament has criticised the government’s handling of the cedi, saying that despite spending billions of dollars on foreign exchange interventions, the currency remains weak.
Speaking to the press on Friday, November 14, former Finance Minister Amin Adam argued that the large injections of foreign currency should have strengthened the cedi far more than they have.
“With the billions of dollars pumped into the market, we expected the rate to be around GH₵8 to the dollar. The market’s weak reaction shows that currency strength cannot simply be bought, it must come from strong economic fundamentals,” he said.
He accused the government of relying on short-term fixes instead of addressing deeper structural problems.
Dr Adam compared the current situation to the IMF-supervised programme under the previous NPP administration, where forex interventions were tightly regulated.
“Under the NPP, the IMF limited the Bank of Ghana to US$80 million in monthly interventions, even though reserves were well above target. By the end of 2024, reserves had reached nearly US$9 billion,” he noted.
He argued that the cedi’s recent stability is due to the strong reserves the current government inherited.
“The new Bank of Ghana management started injecting large amounts of forex into the market from these inherited reserves. The cedi’s performance is not due to any special policy, it’s the result of the solid groundwork laid under the NPP.”
According to the Minority, the Bank of Ghana has injected about US$8 billion into the market since January, which moved the exchange rate from around GH₵14 per dollar on January 6, 2025, to about GH₵11.
Dr Adam said these gains are “small, fragile, and unsustainable,” given the massive cost.
He also accused the government of manipulating public perception by using the November 2024 rate as a benchmark.
“Repeating an untruth doesn’t make it true,” he remarked.
The Minority warned that the heavy interventions are draining the country’s reserves, while core challenges, such as low productivity, weak exports, and poor forex inflows, remain unresolved.
“These resources have been wasted on temporary gains that will disappear once the government can no longer intervene,” they said.
Dr Adam added that the Bank of Ghana has now adopted a new IMF-approved intervention strategy, which recognises that recent improvements in the cedi were driven by unsustainable and opaque measures.
He welcomed the new approach, saying the Bank must now intervene “carefully and transparently,” which he believes is the responsible way forward for the economy.