The Bank ofGhana(BoG) has built strong buffers to effectively deliver on its mandate of maintaining exchange rate stability and supporting the economy against external shocks, the Governor of the Bank of Ghana (BoG), Dr Johnson Pandit Asiama, has stated.
According to him, despite recent pressures on the cedi arising from global geopolitical tensions and increased demand for foreign exchange, the BoG remained well-positioned to prevent excessive volatility in the foreign exchange market.
Dr Asiama in response to a question after 130th Monetary Policy Committee (MPC) press briefing in Accra last Thursday said the central bank had accumulated strong reserve buffers which would enable it to respond appropriately to market developments.
"We have the reserves, we have the buffers, and we should be able to do what we have to do," he stated.
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The Governor explained that Ghana's Net International Reserves, which stood at about $10.9 billion in April 2025, had increased significantly to $12.43 billion currently, reflecting improving external sector conditions.
He stressed that the cedi operated under a managed float regime and was therefore expected to appreciate or depreciate depending on market conditions.
"The cedi is expected to move. It can depreciate and it can appreciate. Our concern is to avoid excessive volatility," he explained.
Dr Asiama attributed the recent depreciation pressures largely to external factors, particularly the ongoing geopolitical tensions in the Middle East, rising crude oil prices and seasonal foreign exchange demand associated with dividend repatriation by multinational companies.
He explained that the global tensions had increased the cost of crude oil imports, thereby placing additional pressure on the country's foreign exchange market.
"The same volume of crude oil is costing more by way of foreign exchange, so naturally there will be some pressure on the cedi," Dr Asiama, noted.
He further explained that the April-May period usually witnesses increased demand for foreign currency as foreign-owned firms transfer dividends abroad.
"This is the period when many companies repatriate dividends, and that naturally affects demand for US dollars," he added.
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Touching on monetary policy, Dr Asiama said the MPC decided to maintain the policy rate at 14 per cent after carefully balancing both domestic economic improvements and emerging global risks.
He noted that although inflation had moderated significantly, uncertainties surrounding external developments, particularly the Middle East crisis, required a cautious policy stance.
According to him, the Committee would continue to monitor incoming economic data before taking further decisions at the next MPC meeting.
On lending rates, the Governor acknowledged concerns about the slow pace at which lower policy rates were being transmitted into commercial bank lending rates.
He explained that banks required time to adjust their loan portfolios to the new low-interest-rate environment while ensuring that credit standards were maintained.
Dr Asiama, however, expressed optimism that lending rates would gradually decline further as macroeconomic conditions continue to improve and stability is sustained.
