Bank of Ghana Intermediates $10bn in Forex in 2025

The Bank of Ghana (BoG) is reported to have injected approximately $10 billion into the foreign exchange market in 2025, utilizing a forex intermediation framework rather than direct intervention.

The move comes after the International Monetary Fund (IMF) expressed concerns earlier in the year regarding the BoG’s $1.4 billion expenditure within the first three months of 2025. While not opposing interventions outright, the IMF stressed the need for transparency, limited scope, and consistency with market-determined exchange rates, cautioning against attempts to artificially fix the cedi’s value.

Responding to these concerns, the Bank of Ghana committed to a clear intermediation policy by the end of September, a pledge it has now fulfilled. The BoG now publicly announces its intended monthly forex injections, signaling adherence to market conditions.

Interventions included $1.15 billion in October, $1 billion in November, and $800 million in December. Excluding the initial $1.4 billion spent in the first quarter, the BoG supplied roughly $6 billion between April and September, averaging $1 billion per month.

Any portion of the offered amount not taken up by market participants is added back to the country’s foreign exchange reserves. As a result, Ghana’s reserves currently stand at $11.4 billion, representing 4.8 months of import cover – the highest level since the onset of the recent economic challenges.

These developments raise critical questions: how is the BoG securing these substantial dollar volumes, is the current intervention rate sustainable, and what risks do the reserves face?

Prior to losing access to the Eurobond market, Ghana routinely raised around $3 billion annually from 2019 to 2021, and approximately $1 billion in preceding years. Combined with earnings from gold, cocoa, and oil exports, these inflows provided significant forex support for the cedi.

With the international capital market largely inaccessible, Ghana has become increasingly reliant on gold and cocoa exports. In 2025, gold has emerged as the dominant factor, driven by the return of Donald Trump to the White House and escalating geopolitical tensions, which have propelled gold prices to record highs.

The average gold price in 2024 was approximately $2,300 per ounce. However, in 2025, prices surged past $4,000 for the first time and currently fluctuate around $4,200. This dramatic increase is the primary enabler of the BoG’s aggressive forex market interventions.

A second key aspect of the BoG’s strategy is the establishment of the Ghana Gold Board. Initially envisioned with a $279 million revolving fund from the central government, the Board’s financing model has evolved. It is now funded through a more complex arrangement involving commercial banks and the BoG.

Under the original model, the BoG collected cedis from commercial banks and transferred the funds to the Gold Board for gold purchases from small-scale miners. The gold was then sold, with the dollar proceeds returned to the BoG, which subsequently supplied the dollars to the commercial banks.

The current approach involves the BoG utilizing “high powered money” to directly purchase gold from the Gold Board. This gold is either sold for foreign exchange, bolstering reserves, or refined and added to Ghana’s gold holdings.

This latter method carries an inherent inflation risk, as it involves injecting new money into the economy. The BoG has been actively implementing liquidity-tightening measures to mitigate this risk, but the situation remains delicate and requires careful monitoring.

The BoG clarified that the $10 billion injection wasn’t solely for cedi support, but also covered payments to independent power producers, bondholders, and other debt service obligations. The ability to meet these commitments is heavily contingent on sustained high gold prices.

Analysts at JP Morgan anticipate continued gold price increases in the short term, a positive outlook for Ghana. However, they caution that a sustainable economy cannot indefinitely depend on commodity price volatility. A significant decline in gold prices would expose the economy to considerable vulnerability.

Experts emphasize the need for greater focus on value addition to Ghana’s raw materials, including the implementation of the planned gold traceability system and the full operationalization of the country’s gold refineries. Supporting non-traditional exports and the industrial sector is also crucial for diversifying foreign exchange sources and reducing reliance on commodity windfalls.

While the BoG’s interventions have helped maintain a relatively stable cedi, this strength contrasts with the weak performance of the industrial sector in the third quarter of 2025. Defending a stronger currency has aided in stabilizing inflation and reducing debt burdens, but it also diminishes the competitiveness of Ghanaian exports.

This disparity highlights the importance of strengthening the country’s productive capacity and ensuring that exchange rate policies support, rather than hinder, long-term economic growth. Ghana has benefited from a fortunate combination of high gold prices and renewed confidence in the BoG’s policy framework, but these conditions are unlikely to persist indefinitely.

Ultimately, the country’s long-term stability will depend less on the volume of dollars the BoG can inject and more on its ability to build an economy that generates foreign exchange through sustainable, productive growth. Structural reforms aimed at expanding value addition, strengthening non-traditional exports, and reducing vulnerability to global commodity cycles are essential. Without such a shift, no amount of intervention will fully protect the cedi or the broader economy when gold prices inevitably fall.

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