How Ghana Quietly Injected $10 Billion to Stabilise the Cedi

Introduction

The Ghanaian cedi experienced an unprecedented period of stability in 2025, appreciating sharply against the United States dollar before settling at a more sustainable level. This movement did not arise from spontaneous market forces; rather, it was the result of a deliberate foreign‑exchange (FX) intervention strategy pursued by the Bank of Ghana. By mobilising roughly $10 billion of foreign currency, the central bank succeeded in reducing exchange‑rate volatility, easing pressure on importers, and restoring confidence in the local currency. This article explains the mechanics behind the intervention, the data that support it, and the broader economic implications for Ghana and for observers of emerging‑market policy.

Key Points

Rapid Cedi Appreciation

Between January and May 2025 the cedi rose from GH₵15.30 to GH₵10.28 per US dollar, a gain of more than 30 percent. Although the rate later levelled around GH₵12.42 in September, the brief surge marked one of the strongest short‑term performances in recent memory.

Scale of FX Intervention

The Bank of Ghana’s foreign‑exchange interventions are estimated to have injected about $10 billion into the domestic market over a ten‑month window. This figure represents the amount of foreign currency that was deliberately sold into the market to offset import demand and to bolster reserve buffers.

Reserve Growth vs. Intervention Size

International reserves increased from $9.11 billion in December 2024 to $11.41 billion in October 2025 – a net gain of only $2.30 billion. The discrepancy between the total FX inflows and the modest reserve rise signals that the bulk of the foreign currency was absorbed by market participants rather than retained as reserve assets.

Source of Foreign Currency

Export earnings in 2025 totalled approximately $31.75 billion, driven by gold, cocoa, oil, and other commodities. After financing imports valued at $14.80 billion, Ghana retained a surplus of $16.95 billion, part of which was directed toward the FX intervention.

Background

Ghana’s monetary framework has long relied on the Monetary Policy Committee (MPC) to manage inflation and exchange‑rate pressures. However, the country’s external position remains vulnerable to commodity price swings and to the composition of its foreign‑exchange inflows. Prior to 2025, the cedi had been under persistent depreciation pressure, largely owing to fiscal deficits, high public debt, and a narrowing current account.

In response, the Bank of Ghana adopted an unconventional approach: rather than allowing market forces to determine the exchange rate, it actively managed FX supply through open‑market operations. This strategy aligns with the “FX intervention” model used by several emerging economies that seek to smooth volatility while preserving reserve adequacy.

Analysis

FX Inflows and Outflows

According to the Bank of Ghana’s quarterly reports, total foreign‑currency inflows between January and October 2025 were roughly $31.75 billion. These inflows comprised export receipts, foreign‑direct investment, remittances, and other official transfers. Concurrently, total outflows — primarily import payments for oil and non‑oil goods — amounted to $14.80 billion. The resulting net surplus of about $16.95 billion provided a substantial pool for intervention.

Reserve Accumulation and Adjustments

Official reserve data show a rise from $9.11 billion to $11.41 billion over the same period. However, when accounting for re‑valuation of gold holdings, petroleum‑related assets, and other adjustments, analysts apply a conservative 30‑35 percent scaling factor to isolate the portion of reserves that truly reflects newly acquired foreign currency. Using a 32 percent adjustment, the estimated amount of FX sold into the market equals roughly $9.96 billion, which rounds to the widely cited $10 billion figure.

Mechanics of the Intervention

FX intervention is recorded in national accounting as:

FX Inflows – Change in Foreign Reserves = FX Intervention

When a central bank sells foreign currency, it injects that amount into the domestic banking system while simultaneously reducing its reserve stock. In Ghana’s case, the modest increase in reserves indicated that most of the foreign currency was absorbed by commercial banks, importers, and other market participants, rather than being hoarded as additional reserves.

Market Impact and Exchange‑Rate Dynamics

The rapid appreciation of the cedi cannot be explained by portfolio inflows alone. Such inflows typically require liberalised capital accounts and are subject to swift reversal. Instead, the data point to a coordinated sale of foreign currency by the central bank that supplied sufficient liquidity to meet import demand and to dampen speculative pressure. The resulting 33‑43 percent short‑term gain in the cedi’s value was therefore a policy‑driven outcome rather than a market‑driven one.

Economic Rationale

By deploying roughly $10 billion, the Bank of Ghana achieved several objectives:

• Stabilised the exchange rate, reducing volatility for businesses and households.
• Alleviated foreign‑exchange shortages that had constrained import‑driven sectors.
• Re‑anchored market expectations, signalling that the authorities were prepared to act decisively.
• Preserved international reserves at a level deemed adequate for external debt servicing.

Practical Advice

For Investors

Investors should monitor the Bank of Ghana’s future FX interventions as an indicator of policy stance. A sustained intervention programme may imply a more stable cedi environment, which can lower currency‑risk premiums for portfolio investment. However, investors must also assess fiscal sustainability and external debt metrics, as these factors can affect the long‑term viability of the intervention.

For Policymakers

Policymakers can learn from Ghana’s experience that a calibrated FX intervention, combined with transparent communication, can restore confidence without exhausting reserves. Future programmes should incorporate clear thresholds for intervention, regular reserve‑accounting adjustments, and a framework for measuring the impact on inflation and growth.

For Businesses

Companies that rely on imported inputs should diversify supply chains and consider hedging strategies to mitigate exposure to sudden FX swings. Understanding the timing of central‑bank operations can help firms plan procurement and pricing strategies more effectively.

FAQ

Conclusion

Ghana’s 2025 experience demonstrates that a carefully calibrated foreign‑exchange intervention can produce rapid currency stabilization, even in an economy with limited reserve buffers. By injecting an estimated $10 billion into the market, the Bank of Ghana succeeded in curbing cedi volatility, supporting importers, and reinforcing confidence in monetary policy. The episode underscores the importance of transparent accounting, realistic reserve‑management targets, and a clear policy framework when deploying large‑scale FX operations. As emerging markets confront similar challenges, Ghana’s approach offers a pragmatic blueprint for balancing short‑term stability with long‑term fiscal sustainability.