College of Ghana Economics Lecturer Professor Patrick Ashming mentioned the current depreciation of the Ghanaian Cedi was manageable and tolerable, insisting that the scenario didn’t but sign a significant menace to macroeconomic stability.
Discuss on Pleasure FM high information evening On Monday, Might 25, Professor Asming mentioned that whereas the native foreign money had depreciated barely prior to now few weeks, its actions remained comparatively modest in comparison with Ghana’s historic expertise of sharp foreign money depreciation.
“We have seen a little bit of a decline above regular over the previous few weeks, however it’s important to perceive that it is nonetheless inside an inexpensive vary when in comparison with historic charges,” he mentioned.
Based on him, the present development displays a deliberate coverage path by the Financial institution of Ghana to permit managed flexibility within the overseas alternate market, quite than aggressively defending a hard and fast alternate price.
“I believe the Financial institution of Ghana positively has greater than sufficient reserves to take care of foreign money stability,” he mentioned.
“It’s a must to perceive that they’ve adopted a brand new framework for intervening within the overseas alternate market. What they’re making an attempt to do is to forestall giant fluctuations, giant depreciation of the foreign money,” he mentioned.
The feedback got here amid rising public concern over CEDI’s current losses in opposition to main foreign currency, notably the US greenback, after months of relative stability that strengthened confidence within the financial system.
CEDI recorded one in every of its strongest performances lately in 2025, benefiting from tight financial coverage, improved overseas alternate reserve ranges, ongoing Worldwide Financial Fund (IMF) help packages, and elevated inflows from gold and cocoa exports.
Nonetheless, current developments within the overseas alternate market have raised considerations amongst companies and importers a couple of potential return to extended instability.
Nonetheless, Professor Asming insisted that the present fluctuations shouldn’t be seen as alarming.
He defined that the central financial institution’s intervention technique is at the moment centered on cushioning the financial system in opposition to extreme shocks, quite than holding the cedi at artificially tight rates of interest.
“Among the interventions that they’re doing are geared toward ensuring that the speed of foreign money depreciation smoothes out. So regardless that individuals are expressing considerations concerning the price of foreign money depreciation, I believe that is inside what is taken into account affordable when it comes to holding the foreign money inside a small band and never permitting the foreign money to depreciate considerably,” he careworn.
The economist additional instructed that the interval of speedy yen appreciation seen final 12 months is unlikely to proceed because the Financial institution of Ghana seems to be pursuing a extra versatile alternate price administration system.
“Now we have to know that the gratitude we had final 12 months is lengthy gone,” he mentioned.
“The central financial institution’s considering for the time being, at the very least based mostly on its communications, is that the foreign money mustn’t fluctuate an excessive amount of,” he added.
Professor Ashming noticed that the cedi had largely traded inside a comparatively steady vary in opposition to the greenback over the previous 12 months, and instructed that the central financial institution would solely actively intervene if the alternate price moved considerably outdoors of that vary.
“For the previous 12 months or so, the foreign money has been hovering between 10.5 and 11.5. Subsequently, I believe large-scale intervention is prone to happen when there’s a threat that the foreign money will deviate considerably from that vary,” he mentioned.
He added that the Financial institution of Ghana is unlikely to constantly inject giant quantities of {dollars} into the market simply to take care of a single alternate price.
“Even if in case you have overseas alternate reserves, you do not simply inject {dollars} into the market to maintain the foreign money weak at a sure price,” he mentioned.
The economist argued that holding the cedi inside a predictable vary would finally profit companies by enhancing planning and lowering uncertainty.
“Companies are actually planning and realizing that even when buying items and companies, the worst-case state of affairs they’re coping with might be 12 and the best-case state of affairs might be 10,” he mentioned.
“And I believe holding it inside that vary will assist,” he added.
Financial analysts have just lately pointed to seasonal foreign money demand pressures, exterior market uncertainty and import-related greenback demand as components behind the current depreciation of the cedi.
Regardless of current developments, Ghana’s overseas alternate reserves stay comparatively sturdy in comparison with a 12 months in the past, offering a cushion for the central financial institution to handle extreme market volatility.
