The Bank of Ghana (BoG) has announced plans to inject an additional US$1 billion into the foreign exchange (forex) market in November 2025, bringing the total forex market intervention for the 2025 fiscal year to US$5.55 billion.

This follows earlier injections of US$ 1.4 billion in the first quarter, over US$ 2 billion in the second quarter, and US$1.15 billion in October 2025.

The central bank’s continued interventions are aimed at stabilizing the Ghanaian cedi amid persistent volatility, but policy experts warn that excessive injections could have counterproductive long-term effects.

In recent years, the BoG has taken a proactive stance in managing exchange rate volatility, particularly as global commodity markets and domestic inflationary pressures have weighed heavily on the cedi.

However, the central bank’s strategy of large-scale forex injections—while providing short-term relief—has raised questions about sustainability and potential market distortions.

Policy analysts contend that while such interventions can be justified when currency volatility becomes excessive, constant and heavy-handed injections risk “crowding out” foreign exchange flows in the formal market.

This means that instead of encouraging forex inflows through market confidence and competitiveness, an artificially strong cedi could deter exporters and remittance senders who may prefer to hold onto or channel funds through informal routes.

The concerns were echoed by the BoG Governor, Dr. Johnson Asiama, during the IMF/World Bank Spring Meetings in Washington D.C. on October 17, 2025, where he revealed that remittance inflows—one of the largest sources of forex—averaged over US$6 billion annually.

However, he noted a decline in remittances following the sharp appreciation of the cedi, suggesting that the bank’s intervention had inadvertently discouraged foreign inflows.

Economists point to Ghana’s dependence on cocoa, gold, and oil exports as another factor complicating the situation.

The recent downturn in international cocoa and gold futures prices has tightened foreign exchange availability, leaving the central bank under pressure to defend the currency.

For a country whose reserves are heavily supported by these export commodities, weaker prices pose a direct threat to forex stability and long-term fiscal health.

Analysts argue that the BoG’s approach risks creating what they describe as a “forced appreciation” of the cedi—a scenario where the exchange rate appears stable or strong only because of heavy central bank intervention, rather than genuine market strength.
Such artificial stability can discourage export competitiveness, reduce foreign investor confidence, and erode the natural balance of the forex market.

Ultimately, monetary economists caution that while short-term currency appreciation may be politically and socially appealing, long-term forex stability should remain the policy priority.

They insist that sustainable stability comes from productive export growth, disciplined fiscal management, and structural reforms—not continuous injections that deplete reserves.