BoG tightens forex rules to shield cedi, sustain economic gains

By Praisebell Rosemond Larbi

In the first half of 2025, Ghanaians have witnessed a marked turnaround in previously crippling macroeconomic conditions that had weighed heavily on microeconomic activity.

A review of the Bank of Ghana’s (BoG) macroeconomic and financial data as of July highlights stronger real sector indicators compared to the same period in 2024, with both business and consumer confidence on the rise.

Inflationary pressures have eased significantly, dropping to 12.1 percent from 23.5 percent at the beginning of the year. Lending rates have moderated to 27 percent from 30.7 percent, supported by a consistent reduction in the monetary policy rate to 25 percent.

Notably, the Cedi has appreciated by 40 percent year-to-date against the US Dollar, underscoring renewed stability.

Inflationary pressures have eased significantly, dropping to 12.1 percent from 23.5 percent at the beginning of the year. Lending rates have moderated to 27 percent from 30.7 percent, supported by a consistent reduction in the monetary policy rate to 25 percent. Notably, the Cedi has appreciated by 40 percent year-to-date against the US Dollar, underscoring renewed stability.

Safeguarding the Gains

Such improvements, however, cannot be left to chance. They require careful management, with the BoG at the centre of this stewardship.

The central bank must maintain real-time oversight of financial flows and large importers’ operations to ensure sound policy decisions that preserve market stability and avert a relapse into past vulnerabilities.

A Key Step to Protect the Cedi

To this end, Governor of the BoG, Dr Johnson Asiama issued a directive on 20 August 2025, instructing commercial banks to halt withdrawals of foreign currencies by companies from accounts not directly funded with cash deposits.

Previously, firms could purchase foreign exchange with Cedis and withdraw dollars in bulk, creating undue demand that weakened the local currency. The new rule curtails this practice, easing pressure on the Cedi.

Export-oriented firms that generate foreign exchange, such as those in oil, gas, and mining, may continue accessing their deposits to meet operational needs.

Meanwhile, companies requiring forex for essential imports but lacking their own earnings will be supported through a transparent BoG programme to ensure access without destabilising the market.

Broader Agenda for Resilience and Transparency

The foreign exchange directive is part of a broader strategy to build resilience and enhance transparency. Addressing banking leaders on 13 August, Dr Asiama outlined urgent reforms spanning credit governance, risk management, and liquidity standards.

These include new rules targeting wilful defaulters, stricter underwriting, enhanced capital buffers, rigorous stress testing, and closing regulatory loopholes.

For years, partial enforcement of financial regulations created gaps and arbitrage that undermined stability.

The Governor has pledged strict compliance to end blind spots, especially in remittance flows, warning banks to adhere fully to existing rules.

Forward-Looking Stewardship

The BoG’s proactive approach marks a shift from reactive firefighting to forward-looking stewardship.

By combining targeted directives with a comprehensive reform agenda, the central bank is not only defending recent gains but also shaping a more resilient, transparent, and globally competitive financial system.

This enhanced visibility and commitment to enforcement remain essential to securing the country’s hard-won macroeconomic stability and laying a sustainable foundation for growth.