The Bank of Ghana has surprised market watchers with a significant reduction in its Foreign Exchange Intermediation Programme for December, setting a new monthly ceiling of 800 million dollars.
This development comes at a time when the cedi continues to record one of its strongest performances in recent years. The decision, which follows months of aggressive intervention in the foreign exchange market, signals a strategic adjustment informed by easing FX demand and the regulator’s newly implemented operations framework.
Data from the central bank shows that only 100 million dollars was auctioned on December 2, followed by another 100 million dollars on December 4. This places the remaining ceiling for the month at 600 million dollars. Compared to previous months, the December allocation represents a moderate reduction. In September, the Bank of Ghana auctioned 1.1 billion dollars, increased the intervention to 1.3 billion dollars in October, and sold exactly 1 billion dollars in November.
According to the central bank, the decision to scale back FX sales for December is driven by a seasonal reduction in demand. Market activity typically slows during the festive period, leading to a decline in FX requirements. The Bank noted that the tapering is also in alignment with its broader strategy to maintain market stability without over-saturating FX supply. It added that subsequent monthly volumes will be determined by prevailing market conditions.
Cedi Performance Remains Strong
The move to reduce FX supply comes on the back of a strong cedi performance throughout 2025. Bank of Ghana figures indicate that the currency has appreciated by 31 percent against the US dollar year to date. Although slightly lower than the 34.86 percent appreciation recorded in October 2025, the cedi remains one of the best performing emerging market currencies this year.
As of December 10, 2025, the local currency is trading at 11.42 cedis to the dollar on the interbank market. Market analysts believe that the central bank’s FX interventions, coupled with improvements in foreign inflows under the Domestic Gold Purchase initiative, contributed significantly to the currency’s resilience. Daily trading volumes on the interbank market stood at approximately 5.5 million dollars in November, culminating in a total monthly turnover of 111.11 million dollars.
In November, the Bank of Ghana announced that its Board had approved a revised Foreign Exchange Operations Framework to guide the objectives and principles governing FX market activities. The framework reinforces the Bank’s commitment to macroeconomic stability under the inflation targeting regime and a flexible exchange rate system.
The new framework seeks to achieve three primary objectives. First, it aims to support reserve accumulation to cushion the economy against external shocks. Second, it is designed to reduce excessive short-term volatility in the FX market by addressing disorderly conditions without undermining exchange rate flexibility. Third, it focuses on intermediating FX flows in a market-neutral manner by using inflows from the Gold Purchase Programme and export surrender requirements.
This structured approach ensures that the central bank will operate in an orderly, transparent and non directional manner. Future interventions will follow what the Bank describes as a structured discretion under constraint model, ensuring that operations address market imperfections rather than targeting specific exchange rate values. The regulator reiterated that reserve accumulation and FX intermediation will be pursued through well communicated and transparent activities.
Market Reaction and Outlook
The decision to lower December FX supply has elicited mixed reactions among financial analysts. Some believe the move reflects confidence in the cedi’s current stability and the overall health of the FX market. Others argue that while demand may be lower during the festive season, maintaining strong FX buffers remains essential given the unpredictable nature of global economic conditions.
However, the central bank insists that the December adjustment is tactical and consistent with evolving market needs. It added that future auction volumes will be determined by conditions in the domestic and international markets. Market participants also expect that continued inflows from gold purchases and export surrender rules will strengthen FX availability in early 2026.
With the revised framework in place and the cedi holding firm, attention now turns to how the central bank will balance reserve accumulation with market liquidity in the coming months. The December reduction points to a more cautious and flexible strategy that prioritizes long term stability over aggressive short term interventions.
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