No fixed target for cedi – BoG Governor
By Praisebell Rosemond Larbi
The Governor of the Bank of Ghana, Dr. Johnson Asiama, has clarified that the central bank does not aim for a fixed target exchange rate despite the cedi’s recent strong performance against major currencies.
Speaking after the latest Monetary Policy Committee meeting in Accra, Dr. Asiama explained that the Bank’s priority is to prevent excessive currency volatility rather than defend a specific cedi level. “We don’t have a policy that triggers action once the cedi hits a particular point. Our concern is with extreme swings, and we only intervene to avoid disruptions,” he said.
Addressing rumors that the cedi’s strength comes at the expense of reserves, Dr. Asiama dismissed such claims, citing robust international reserves, sound monetary policy, and improved investor confidence as key drivers. Ghana’s reserves stood at $10.6 billion at the end of April 2025, providing 4.7 months of import cover.
On concerns that the stronger cedi has yet to reduce prices of goods and services, the Governor urged patience, noting that market competition may eventually lead to lower retail prices.
The Bank of Ghana also maintained its policy rate at 28 percent and revised reserve requirements, now requiring banks to hold reserves in the same currency as their deposits to improve liquidity and monetary policy effectiveness.
Dr. Asiama reported signs of recovery in private sector credit and expressed confidence that the inflation target of 12 percent for 2025 remains achievable, with a return to single-digit inflation expected by early 2026.
Regarding reserve management, he noted there is no upper limit but emphasized a minimum buffer of three months of import cover to ensure economic stability. “What we have now is adequate and provides the necessary buffer to meet external obligations,” he emphasised.
