{"id":11678,"date":"2025-07-15T13:03:04","date_gmt":"2025-07-15T13:03:04","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/11678\/"},"modified":"2025-07-15T13:03:04","modified_gmt":"2025-07-15T13:03:04","slug":"imf-confirms-africa-policy-lens-report-that-bog-pumped-1-4-billion-to-boost-cedi","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/11678\/","title":{"rendered":"IMF confirms Africa Policy Lens’ report that BoG pumped $1.4 billion to boost cedi"},"content":{"rendered":"

Governance think tank, the Africa Policy Lens, says it has been vindicated by recent revelation by the International Monetary Fund<\/a> (IMF) that the <\/a><\/a><\/a><\/a>Bank of Ghana<\/a> pumped in dollars to support recent stability of the cedi.<\/p>\n

The IMF, in its latest review of Ghana’s programme, revealed that the <\/a><\/a><\/a><\/a>Bank of Ghana<\/a> released a whopping $1.4 billion forex support to sustain Ghana\u2019s currency against the US dollars.<\/p>\n

Following the IMF’s confirmation, the Africa Policy Lens (APL) has revisited a report it issued in May this year which attributed the cedi upsurge to a deliberate forex support by the <\/a><\/a><\/a><\/a>Bank of Ghana<\/a>.<\/p>\n

The Africa Policy Lens indicated in a statement that its May 2025 analysis that the government was deliberately boosting the forex market with the US dollar was widely criticised but \u201chowever, the IMF has now corroborated what our analysis clearly pointed out in May and this has vindicated us\u201d.<\/p>\n

In its May 2025 report, the APL, while commending the incumbent government for the cedi gains against the dollar, disclosed that the gains had been made possible due to an accumulated gold by the Central Bank, making it possible for the bank to pump more dollars into the forex market.<\/p>\n

\u201cGhana\u2019s currency, the cedi, has surged to become one of the world\u2019s best-performing currencies in 2025, appreciating by over 20% against the US dollar year-to-date. This remarkable turnaround follows a turbulent 2024 when the cedi lost nearly a quarter of its value, contributing to high inflation and economic instability.<\/p>\n

\u201cAs of mid-May 2025, the cedi trades at the retail around GH\u00a213.5 to the US dollar \u2013 a 17% gain since January 1. Inflation has also eased (down to about 21% in April 2025 from much higher levels), reflecting reduced import costs as the currency strengthens. The Africa Policy Lens (APL) commends this progress in macroeconomic stability.<\/p>\n

\u201cHowever, we note that the foundations of this appreciation and the sustainability of these gains merit close scrutiny and prudent policy action,\u201d the Africa Policy Lens report read.<\/p>\n

Role of Gold Reserves and Forex Interventions<\/p>\n

In the report, the Africa Policy Lens observed that a key factor in the cedi\u2019s stabilisation was Ghana\u2019s strategic use of gold reserves and direct market interventions.<\/p>\n

\u201cThe <\/a><\/a><\/a><\/a>Bank of Ghana<\/a> (BoG) aggressively accumulated gold through its Domestic Gold Purchase Programme (DGPP) (popularly \u201cGold-for-reserve\u201d and now the Gold Board initiative) during 2023-2024. Official data show gold reserves climbed from 8.78 tonnes in May 2023 to 30.53 tonnes by December 2024 \u2013 an increase of ~21.8 tonnes in 20 months, averaging about 1.1 tonnes added per month (see Figure 1).<\/p>\n

\u201cThis bolstered Ghana\u2019s foreign exchange buffer significantly. By contrast, from January to April 2025, gold reserves edged up only from 30.53 to 31.37 tonnes \u2013 a rise of just 0.84 tonnes in four months (about 0.21 tonnes per month).\u201d<\/p>\n

\u201cThe sharp slowdown in gold accumulation suggests that authorities may have tapped into these gold reserves or at least paused new purchases, possibly to inject U.S. dollars into the market and meet forex demand. In effect, Ghana appears to be leveraging its gold stockpile to support the cedi, a tactic that boosts dollar liquidity and calms depreciation pressure in the short term.\u201d<\/p>\n

The report also made claims about the millions of dollars the <\/a><\/a><\/a><\/a>Bank of Ghana<\/a> had injected into the forex market to cushion the cedi.<\/p>\n

It said; \u201cIndeed, the central bank\u2019s direct forex market interventions have been massive. In April 2025 alone, BoG injected $490 million into the foreign exchange market to ease dollar shortages and strengthen the Cedi.\u201d<\/p>\n

\u201cReports further indicate sizable interventions in other months \u2013 for example, about $264 million was injected in March 2025 as part of the stabilization strategy. Cumulatively, nearly $1 billion is estimated to have been supplied to the forex market by the government and central bank between January and May 2025.\u201d<\/p>\n

While acknowledging the positive impact of the cedi appreciation, the APL noted that these gains could be sustained through sound economic management, therefore urged the government to learn from the 2017\/2019 situation when the cedi was similarly strong.<\/p>\n

\u201cThe lesson for today is clear: sustainable exchange rate stability comes from sound economic management rather than one-off measures. The current administration can draw on this historical parallel by continuing structural adjustments initiated under the IMF program (e.g. fiscal consolidation, prudent debt management, and rebuilding of foreign reserves) to ensure the cedi\u2019s strength is lasting.<\/p>\n

\u201cJust as the stability of the cedi contributed to a decline in debt ratios around 2017, maintaining that stability through robust policies now will reinforce Ghana\u2019s economic resilience going forward. APL urges policymakers to view the 2017\u20132019 period not as an anomaly, but as a benchmark to surpass \u2013 through deeper reforms that address the root causes of cedi volatility.\u201d<\/p>\n

Read APL\u2019s report below:<\/p>\n<\/p>\n

AME<\/p>\n

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