The Institute for Economic and Research Policy Promotion (IERPP) asserts that it feels justified by the International Monetary Fund’s recent remarks warning the government about its approach to managing the Cedi’s value.
In the IMF’s fourth assessment under Ghana’s Extended Credit Facility program, the organization criticized the government’s ongoing strategy of injecting foreign currency into the economy to uphold the Cedi against international currencies rather than allowing natural market mechanisms to determine its exchange rate.
“The Bank of Ghana must sustain a suitably firm monetary policy until inflation meets its target. It should also scale down its participation in the forex market and permit more flexibility in exchange rates—ideally by introducing a structured domestic forex intervention framework,” the IMF stated in its review.
In a communiqué endorsed by Executive Director Prof. Isaac Boadi, also Dean of the Faculty of Accounting and Finance at UPSA, the IERPP highlighted that it had previously voiced similar warnings to the government, which unfortunately went unheeded.
IERPP emphasized that the IMF’s comments did not merely echo its own but reinforced its concern that “the administration was intentionally flooding the market with dollars to artificially sustain the cedi’s value.”
“Although this might create a short-lived impression of currency strength, it distorts fundamental market functions, incentivizes excessive imports, and undermines local manufacturing—a harmful trifecta for sustainable economic development.”
“To date, the Bank of Ghana has yet to unveil a transparent and systematic forex intervention framework. Its market maneuvers remain inconsistent and obscure, fostering speculation and uncertainty. Rather than letting exchange rates align with actual economic conditions, the BoG has pursued forceful dollar injections, especially during critical periods. This superficial approach conceals deeper structural challenges—precisely what both bodies have warned against.”
“Even with such consistent feedback, the behaviour of the BoG and the government reflects a clear dismissal of guidance from both the IMF and IERPP.”
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