Bank of Ghana has denied allegations that it has manipulated the foreign exchange market, noting that, currently that market is controlled by commercial banks.
It notes the Central bank only intervenes for general economic stability purposes, stressing that its actions fall squarely within a flexible exchange rate framework aimed only at curbing excessive volatility.
The Governor of the Bank of Ghana, speaking at the IMF–World Bank Governor Talk Series in Washington, D.C., explained that while the Bank occasionally intervenes to stabilise the cedi, such actions are reserved for periods of exceptional market pressure.
“The framework that we have is a flexible exchange rate management framework. Essentially, what we do is smoothen excessive volatilities,” Dr. Johnson Asiama explained.
Addressing concerns about the scale of intervention, he said: “Yes, there were allegations about whether we were intervening in the market, but that was not exactly the case,” noting that significant foreign outflows had required short-term support from the central bank.
According to Dr. Asiama, between the second and third quarters of 2025, Ghana undertook several “lumpy” foreign payments, including billions of U.S. dollars to Independent Power Producers (IPPs) and domestic bondholders who exited their holdings amid the cedi’s appreciation.
At the same time, remittance inflows weakened, draining liquidity from the interbank foreign exchange market.
“In the mix of that, the central bank had to step in. The interbank FX market had dried up, so the central bank had to provide that support,” he said.
Dr. Asiama added that market conditions have since improved, thanks to directives requiring mining firms to channel all foreign exchange inflows through commercial banks — a measure that is already showing positive results.
“We do not over-support the market at all. What we seek to do is limit volatility to ensure smooth dynamics in the market, and that is the framework we will maintain going forward,” he affirmed.
Dr Asiama further noted that recent pressures on the foreign exchange market were triggered by large energy sector payments and investor exits, not by direct market intervention from the Central Bank. He emphasized that the Bank had to undertake a series of “lumpy” foreign exchange payments between July and August to clear long-standing energy debts and other domestic obligations.
“Yes, there were allegations about whether we were intervening in the market. But that was not exactly the case,” he explained.
The Governor’s remarks come amid renewed public scrutiny of the Bank of Ghana’s foreign exchange management practices and growing interest in the country’s energy sector debt, which continues to weigh heavily on fiscal stability.
“Between the second and third quarter, we had to do a number of lumpy payments. There were all these large arrears in payments to some of the IPPs. These were billions of US dollars.”
He revealed that the Central Bank also faced additional outflows from some domestic bondholders who decided to liquidate their investments after the cedi appreciated.
“We also had some of the domestic debt-affected bondholders who wanted to exit. They felt that because the currency had appreciated, it was the right time to take up their investment. We had to allow them to go,” he said.
The Bank of Ghana Governor said those combined pressures temporarily tightened liquidity in the foreign exchange market.
“We did a lot of lumpy payments between July and August, and you might have seen some of that,” he noted.
Dr. Asiama also disclosed that the situation coincided with a decline in remittance inflows, which typically provide over US$6 billion in annual forex injections.
“Because all these inflows accrue to the central bank, and it was happening at a time when we saw some decline in remittance inflows, the central bank needed to step in to meet all those lumpy payments,” he said.
According to him, the interbank foreign exchange market “had dried up” during that period, forcing the Bank of Ghana to provide temporary support.
“The central bank needed to provide that support. But I’m happy to say that the interbank FX market has come back,” DrAsiama said.
He explained that the central bank has since written to mining firms to route their inflows through commercial banks to improve liquidity in the FX market.
“We are beginning to see some pick-up in interbank FX market activity,” he said, clarifying that the directive covers all commodities except gold.
The Governor stressed that with improved market conditions, the central bank no longer needs to be heavily involved in supplying dollars.
“As of yesterday, we had committed to make available US$150 million. This morning, when I checked, the market had picked up only US$90 million, so US$60 million automatically goes into our reserves,” he said.
“Same thing Tuesday — we made available US$150 million, and the markets picked up less than half that. So automatically, it goes into our reserves.”
He dismissed claims that the Bank was over-supporting the market.
“We do not over-support the markets at all. All we seek to do is to limit volatility and ensure smooth market dynamics. That’s the framework we will maintain going forward,” Dr Asiama emphasized.
By Adnan Adams Mohammed
