Institute for Economic Research supports IMF warning on BoG’s dollar strategy
The Institute for Economic Research and Policy Promotion (IERPP) says the International Monetary Fund’s (IMF) latest concerns over Ghana’s foreign exchange policy confirm long-standing warnings it has issued to the government and the Bank of Ghana (BoG).
In its fourth review of Ghana’s performance under the Extended Credit Facility (ECF), the IMF urged the BoG to reduce its intervention in the forex market and allow greater exchange rate flexibility.
The Fund also advised the BoG to adopt a formal internal FX intervention framework and maintain a tight monetary stance until inflation returns to target.
Reacting to the development, the IERPP released a statement on Tuesday, July 9, reiterating earlier warnings it had made regarding the government’s approach to stabilizing the Cedi.
“These warnings from the IMF do not just validate but vindicate what the Institute has consistently cautioned against,” said Professor Isaac Boadi, Executive Director of the IERPP and Dean of the Faculty of Accounting and Finance at the University of Professional Studies, Accra (UPSA).
The Institute accused the government of deliberately injecting large volumes of dollars into the system to artificially maintain the Cedi’s value. It warned that such short-term strategies distort market dynamics, encourage cheap imports, and hurt local production.
According to the statement, the central bank’s lack of a formal and transparent FX intervention policy continues to fuel uncertainty and speculation in the market.
“To date, the BoG has not adopted a clear, published FX intervention framework. Its market operations remain ad hoc and opaque,” the Institute stated.
The IERPP said this pattern of aggressive dollar sales, particularly during politically sensitive periods, undermines market confidence and conceals deeper structural issues within the economy.
The group concluded that despite clear advice from both domestic and international institutions, the government and central bank appear committed to policies that could threaten long-term economic stability.
