Bank of Ghana Flags Market Expectations as Key to Sustaining Cedi Stability

Accra, Ghana — The Bank of Ghana has emphasized that sustaining the cedi’s recent stability will depend increasingly on market expectations, even as the local currency closed 2025 with one of its most consistent performances in years.

Opening the 128th Monetary Policy Committee (MPC) meeting, Governor Dr. Johnson Pandit Asiama highlighted that the cedi’s strength last year was underpinned by improved confidence and a stronger external position. He cautioned, however, that going forward, sentiment and perceptions would play a central role in maintaining stability.

“Foreign exchange stability and expectations. The cedi has been remarkably stable in 2025, reflecting improved confidence and a strong external position. While recent pressures appear largely seasonal, expectations will now play a central role in sustaining stability,” Dr. Asiama said.

The remarks indicate a shift from structural drivers—such as reserves and capital inflows—toward the importance of policy credibility, clear communication, and market confidence in anchoring the currency.

Ghana’s improved external buffers and stronger current account performance helped stabilize the cedi last year, easing volatility that had previously weighed on businesses, importers, and consumers. Yet the Governor warned that negative market sentiment could quickly reverse these gains, even without immediate structural shocks.

Recent fluctuations appear seasonal, suggesting that the Bank of Ghana does not see an urgent systemic threat. Still, the MPC will now pay close attention to expectation management, using policy signals and communication to prevent speculative pressures from emerging in the foreign exchange market.

Analysts note that the central bank’s focus on expectations underscores the growing role of credibility as a frontline defence for currency stability, particularly as Ghana prepares for heightened oversight under its IMF-supported economic programme.

As 2026 begins, the cedi’s path will likely hinge not just on reserves or inflows, but on the discipline, transparency, and consistency of fiscal and monetary policy, and the confidence that market participants place in them.

Source: Accra Business News