The Bank of Ghana (BoG) has announced plans to inject up to $1.15 billion into the foreign exchange market this month as part of efforts to stabilise the Ghanaian cedi.
The central bank says the move will be carried out through twice-weekly spot market auctions under its Domestic Gold Purchase Programme. The auctions, which begin in October, will be open to all licensed banks and conducted on a price-competitive basis.
BoG Governor Dr Johnson Asiama said the initiative is designed to deepen the interbank FX market, improve transparency in price discovery, and help curb volatility in the local currency.
“There will be no special conditions or earmarked allocations. This is to ensure fair and transparent access for all market participants,” Dr Asiama said during a meeting with heads of commercial banks in Accra.
The total amount of foreign currency offered each month could vary, depending on market conditions. However, the bank said its overarching aim is to reduce pressure on the cedi and build resilience in the financial system.
The Ghanaian cedi has come under sustained pressure in recent months due to rising import demand, reduced export earnings, and broader global economic headwinds.
The Domestic Gold Purchase Programme, which underpins the new forex auctions, was introduced to help the country build gold-backed reserves using locally mined resources. It is part of a broader effort by the BoG to reduce reliance on foreign currency inflows and ensure long-term exchange rate stability.
Beyond stabilising the cedi, the central bank is also urging commercial banks to expand support for key sectors of the economy, particularly small and medium-sized enterprises (SMEs) and agribusinesses.
The BoG is encouraging banks to develop export-oriented financial products, make greater use of local insurance firms for import coverage to retain foreign currency, and explore stock market listings to boost transparency and capital strength.
The move by the BoG comes as Ghana continues to grapple with a challenging economic outlook, with inflation concerns and exchange rate pressures weighing on recovery efforts.
Source:TheDotNews