How Ghana’s $10 Billion Forex Ballet Keeps the Economy Dancing on a Knife-Edge
This year, the Bank of Ghana released about US$10 billion to the foreign exchange market to help stabilize the cedi. At first, the IMF was concerned about how large the interventions were, especially early in the year. But later, the IMF became more comfortable after the Bank adopted a more open and market-driven approach, with clearly planned and regularly announced monthly injections. Much of the support came from gold revenues, and by 2025 this helped increase Ghana’s foreign reserves to about US$11.4 billion, enough to pay for nearly five months of imports. Gold has emerged as Ghana’s primary source of foreign exchange, replacing lost Eurobond issuance, supported by very high prices and a number of new financing arrangements through the Ghana Gold Board and commercial banks, including some direct central bank purchases with inflationary risk. Although the policy helped stabilise the cedi, reduce inflationary pressures and support debt servicing and energy-sector payments, it has also increased the country’s exposure to a decline in gold prices, and come amid very weak industrial performance, underlining the importance of structural reforms, value addition and export diversification for ensuring any longer-term stability is driven by productive growth rather than commodity windfalls.
