Cedi should be GH₵8 to dollar despite billions spent on forex interventions

The Minority in Parliament has criticised the government’s handling of the cedi, arguing that despite billions of dollars spent on foreign exchange interventions, the currency remains weak.

Addressing the press on Friday, November 14, former Finance Minister, Dr. Amin Adam, said,
“With the significant billions of dollars of interventions, we expected the rate to be at GH₵8 to a dollar. The market’s muted response reveals a sophisticated understanding that currency strength cannot be purchased; it must be earned through sound economic fundamentals.”

He accused the government of relying on short-term market support rather than addressing underlying structural issues. Dr. Adam contrasted the current approach with the IMF-guided programme under the previous NPP administration, noting that forex interventions were strictly controlled.

“During the NPP administration, the IMF restricted the Bank of Ghana from intervening heavily in the forex market. The intervention budget was fixed at US$80 million per month, despite international reserves exceeding the IMF target. By the end of 2024, reserves stood at almost US$9 billion,” he said.

He argued that the cedi’s recent gains stem from reserves inherited from the NPP government, not current policy measures. Since January, the Bank of Ghana has injected roughly US$8 billion into the market, reducing the exchange rate from about GH₵14 per dollar to nearly GH₵11.

“Despite these burdensome interventions, the gains remain disappointingly modest and fundamentally unsustainable,” Dr. Adam added.

He also criticised what he called the “propaganda management” of the economy, questioning the government’s use of the November 2024 exchange rate as a benchmark.

“Merely repeating an untruth does not make it the truth,” he said.

The Minority warned that aggressive interventions are depleting international reserves, while key issues, including low productivity, weak export performance, and insufficient foreign exchange inflows, remain unaddressed.

Dr. Adam welcomed the Bank of Ghana’s adoption of a new IMF-backed intervention framework, noting that the cedi’s gains under the previous strategy were “non-transparent and unsustainable.” He said the Bank must now act “in a measured and transparent manner,” describing it as the responsible approach the economy requires.

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