Ghana Unleashes $1 Billion FX Intervention to Sustain Cedi’s Historic Gains
- Jan 16
- 7 min read
Accra, January 15, 2026 – Ghana’s central bank is moving decisively to reinforce the country’s currency after an unprecedented year of gains. The Bank of Ghana (BoG) has announced plans to inject up to $1 billion into the foreign exchange market in January 2026 to stabilize the cedi following its remarkable 40.7% appreciation against the US dollar in 2025. The intervention – the largest in recent memory – aims to dampen volatility and sustain the cedi’s historic gains as the new year begins.
Central Bank Moves to Stabilize the Cedi
The BoG’s $1 billion foreign exchange intermediation programme is being rolled out through twice-weekly auctions to banks and businesses. According to a central bank communication, these auctions will be conducted in a “market-neutral” manner under a recently approved FX Operations Framework designed to smooth out short-term swings. “We have sufficient reserves to meet market demand,” BoG officials assured, noting Ghana ended 2025 with roughly $13.8 billion in gross reserves. The central bank stresses that this proactive sale is meant to curb excess volatility rather than signal any fundamental weakness.
The timing is strategic. January typically brings seasonal pressure on Ghana’s currency as businesses restock importsand local companies remit dividends to foreign investors, driving up dollar demand.
Already in the first weeks of 2026, demand at BoG’s forex auctions has far outstripped supply, and the cedi has eased slightly after its strong run last year. By front-loading up to $1 billion of FX liquidity in January, authorities hope to prevent a repeat of past first-quarter slumps, protecting the cedi’s newfound stability.
Cedi’s Historic 2025 Rally
Ghana’s currency is coming off its best performance in over 30 years. In 2025 the cedi strengthened about 41%against the U.S. dollar – its first annual gain since at least 1994. This dramatic turnaround made the cedi one of the world’s top-performing currencies last year. After starting 2025 around GH¢15.75 to $1, the cedi ended the year at approximately GH¢10.45 per $1. The rally was broad-based: the cedi also rose 30.9% against the British pound and 24.0% against the euro in 2025, according to Bank of Ghana data.
What fueled such a reversal? Analysts point to a confluence of favorable factors that bolstered confidence in Ghana’s economy:
Tight Monetary Policy: The Bank of Ghana’s aggressive monetary tightening – including liquidity withdrawals and maintaining high interest rates – sharply curtailed inflation and FX demand. The cedi’s surge in early 2025 coincided with a collapse in money supply growth, indicating that “as cedi liquidity was withdrawn…the currency strengthened”. By constraining credit and anchoring expectations, BoG policy created an environment for the cedi to appreciate.
IMF Program & Fiscal Discipline: Ghana entered a $3 billion IMF support program in 2023 amid a debt crisis, and the government – led by President John Mahama – undertook painful fiscal reforms. Spending cuts and a debt restructuring helped narrow the deficit to 2.8% of GDP in 2025, restoring investor confidence. The IMF’s continued disbursements and endorsement of Ghana’s policies signaled that the economy was stabilizing under stricter discipline.
Export Windfall from Gold: A boom in gold exports turbocharged Ghana’s external accounts. Gold prices hit multi-decade highs in 2025 – their best year since 1979 – boosting Ghana’s trade balance. The government’s new GoldBod initiative, launched in May 2025 to formalize small-scale gold purchases, further channeled more gold into official exports. As a result, international reserves swelled by 24% to reach $11.4 billion by October. The stronger hard-currency inflows from gold (and other exports like oil and cocoa) eased pressure on the cedi.
Debt Relief and Confidence: Ghana’s aggressive debt restructuring efforts also underpinned the cedi’s revival. After defaulting in 2022, the country restructured its domestic debt and reached agreements covering the bulk of its $30+ billion external debt by mid-2025, including relief from bilateral creditors. With the overhang of unsustainable debt being addressed, Ghana received credit rating upgrades and saw its reissued Eurobonds rally. Ghanaian dollar bonds returned over 30% in 2025, reflecting renewed investor appetite. This improved sentiment around Ghana’s solvency translated into a stronger currency.
Officials say the cedi’s appreciation is a sign of economic recovery. “The cedi’s stability is already feeding into broader gains, including stabilised prices and lower inflation for imported goods,” Finance Minister Dr. Cassiel Ato Forson noted mid-2025. After years of double-digit depreciation, the cedi’s comeback in 2025 stands as a dramatic vote of confidence in Ghana’s reforms. The challenge, economists caution, is to ensure these gains are durable by addressing structural issues and avoiding policies that could reignite inflation or currency slumps.
Inflation, Trade and Market Implications
Ghana’s inflation has already benefited enormously from the cedi’s strength. Annual consumer price inflation plunged from 54% in December 2022 to just 5.4% by December 2025 – the lowest level in Ghana since a statistical rebasing in 2021 and back within the central bank’s 6–10% target band. Cheaper import costs, thanks to the firmer cedi, helped drive this disinflation. Key imported staples like fuel and rice saw price stabilization, easing pressure on household budgets. The return to single-digit inflation prompted the BoG to begin cautiously easing interest rates in late 2025, after having kept its policy rate at a record 30% earlier in the year to crush inflation.
For importers and consumers, the cedi’s revival has been welcome news. Businesses have been able to import raw materials and goods at lower effective cost, sometimes passing savings to shoppers. The Ghana Union of Tradersnoted that the stronger currency in 2025 helped reduce port clearing costs and stabilize retail prices, providing relief after the high inflation of previous years. Exporters, on the other hand, face a mixed picture. While a stable currency aids planning and keeps input costs down, those earning in U.S. dollars (such as cocoa and gold producers) now get fewer cedis per dollar of revenue. Export-reliant industries may see profit margins tighten if the cedi remains elevated. Some exporters are urging the central bank to avoid “over-strengthening” the currency to maintain Ghana’s international competitiveness, even as they acknowledge the broader economic benefits of stability.
Ghana’s external position appears more secure entering 2026. The combination of improved trade balances and inflows has bolstered the reserves war chest to $13–14 billion – covering well over five months of import needs. These reserves give the BoG ammunition to manage the exchange rate. Indeed, the ongoing $1 billion January intervention is being drawn in part from the central bank’s reserve buffers (a portion of which were built through Ghana’s novel gold purchase program and IMF disbursements). Market watchers note that by selling dollars now (and taking in cedi liquidity), the BoG is also indirectly sterilizing excess local currency, which aligns with its anti-inflation stance.
Local financial markets have responded positively to the cedi’s revival and policy consistency. Ghana’s stock exchange rallied in late 2025, and the cedi’s stability has reduced uncertainty for businesses and investors. “We expect only a modest cedi depreciation of about 8% in 2026, well below historical averages,” projected Fitch Solutions in a recent outlook. They cited elevated gold prices and healthy reserves as buffers that will “limit any undue pressure on the exchange rate” in coming quarters. However, Fitch and others foresee slightly higher inflation by late 2026 as domestic demand picks up – a sign that the central bank may eventually need to strike a balance between supporting growth and maintaining currency stability. For now, Ghana’s bondholders and equity investors are cheering the newfound macroeconomic stability: Ghana’s sovereign risk premium has narrowed, and the country’s restructured bonds are trading up as default fears recede.
Outlook and Reactions
As 2026 begins, the key question is whether the cedi’s extraordinary run can be sustained. The consensus among analysts is that some correction is natural after such outsized gains. Already, the cedi has pulled back slightly from its peak — trading around GH¢11.4 per $1 on the interbank market in mid-January — due to seasonal dollar demand. The BoG’s swift intervention suggests authorities are determined to avoid a sharp reversal. Much will depend on the continuation of prudent policies: containing fiscal deficits in an election year, sticking to IMF reform benchmarks, and carefully managing liquidity to prevent an overheating economy.
Businesses and financial institutions are positioning accordingly. Banks and corporate treasurers are reportedly taking advantage of the strong cedi to pay down dollar-denominated debts and hedge future forex needs. Importers are locking in forward contracts at favorable rates for the year ahead, while some exporters have increased their dollar reserves as a buffer in case the cedi weakens again. “We don’t expect a return to the wild swings of 2022–2023, but it’s prudent to plan for a bit more volatility,” observed a currency analyst at Databank. Ghana’s recent experience – from crisis to rapid recovery – has made companies acutely aware of FX risk. Many firms are now formalizing policies to maintain a balanced mix of cedi and foreign-currency holdings, ensuring that a sudden swing in the exchange rate won’t catch them off-guard.
International investors, too, remain cautiously optimistic. Ghana has regained the attention of frontier-market funds after its 2025 performance. The focus is now on policy continuity. If Ghana can maintain fiscal discipline through the 2026 election cycle and continue rebuilding its economy, the cedi may well consolidate its gains rather than retrace them. Any slippage, however – be it runaway government spending or a stall in reforms – could prompt capital outflows and put the currency under pressure. The BoG’s credibility is thus on the line, and so far it is earning plaudits for its handling of the turnaround. “The lesson from 2025 is that disciplined policy can achieve what seemed impossible,” says Dr. Dennis Nsafoah, a U.S.-based economist, referencing the cedi’s rebound. “The onus is now on Ghana to stay the course.”
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