Ghana’s Finance Minister, Dr. Cassiel Ato Forson, has assured the public that the Ghanaian cedi has remained relatively stable against the US dollar since February 19, 2025.
Despite ongoing pressures in the global forex market, the government has implemented several measures to sustain the resilience of the local currency.
Dr. Ato Forson revealed that as of March 14, 2025, the cedi was trading at GHS 15.53 to a dollar on the interbank forex market. This represents a depreciation rate of 5.3 percent, which is an improvement over the 5.7 percent depreciation recorded during the same period last year. The Finance Minister attributed this relative stability to strategic interventions by the government and the Bank of Ghana (BoG).
A key factor in the cedi’s stability is the tight monetary policy stance adopted by the Bank of Ghana. According to Dr. Ato Forson, the central bank has implemented liquidity control measures to limit excessive money supply, reducing pressure on the foreign exchange market. By tightening liquidity, the BoG has been able to manage inflation and prevent speculative trading, which often exacerbates currency depreciation.
The Finance Minister further emphasized that the central bank’s interventions have ensured that the cedi remains stable within the interbank forex market, even as demand for foreign currency fluctuates. He noted that these policies will remain in place as part of broader efforts to sustain macroeconomic stability.
Government Measures to Support Cedi Stability
In addition to the Bank of Ghana’s monetary policies, the government has introduced several measures aimed at ensuring the long-term resilience of the cedi. One of the most notable initiatives is the establishment of the Gold Board, which seeks to enhance foreign currency inflows by leveraging Ghana’s gold resources.
Dr. Ato Forson explained that the Gold Board is expected to play a significant role in boosting the country’s foreign exchange reserves. By refining and trading gold locally, Ghana can increase its foreign currency holdings, thereby reducing reliance on external borrowing and mitigating exchange rate volatility.
Another key intervention is the frontloading of forex market liquidity by government institutions. The Finance Minister noted that the government has made efforts to ensure that foreign exchange inflows are well-timed to meet demand, preventing sudden spikes in the exchange rate.
The government has also taken steps to reduce unnecessary expenditures, which in turn limits the demand for foreign currency. Dr. Ato Forson indicated that the administration has prioritized cost-cutting measures in various sectors to ensure a more efficient use of resources.
By minimizing excessive spending, the government aims to reduce the fiscal deficit, which has historically contributed to exchange rate instability. Lower fiscal deficits mean reduced reliance on external borrowing, helping to stabilize the cedi in the long run.
Import Substitution and the 24-Hour Economy Initiative
Looking ahead, the Finance Minister highlighted the importance of import substitution in strengthening the cedi. The government’s “24-hour economy” initiative is expected to boost local production, reducing the country’s dependence on imported goods.
Dr. Ato Forson explained that by encouraging local manufacturing, Ghana can decrease its demand for foreign currency used to import goods. This, in turn, will reduce pressure on the forex market and help sustain the cedi’s value.
The import substitution strategy aligns with broader economic policies aimed at achieving self-sufficiency in key sectors such as agriculture, energy, and manufacturing. By promoting local industries, the government hopes to create jobs, enhance productivity, and maintain currency stability in the long term.
Despite the relative stability observed in recent weeks, the Finance Minister acknowledged that external factors continue to pose risks to the cedi. Global economic uncertainties, fluctuations in commodity prices, and geopolitical tensions can all impact exchange rate movements.
However, Dr. Ato Forson remains optimistic that the measures put in place will ensure sustained stability. He assured the public that the government remains committed to proactive policies that will keep the cedi resilient against external shocks.
Moving forward, stakeholders in the financial sector will continue to monitor forex market trends and implement necessary adjustments to maintain stability. The collaboration between the Bank of Ghana and government institutions will be crucial in sustaining the gains made so far.
READ ALSO: Dr. Bawumia’s Role in NPP’s 2024 Defeat Questioned
