The Bank of Ghana (BoG) has declared a substantial market intervention, announcing plans to pump up to $1 billion into the foreign exchange market during November 2025 as part of its revised Foreign Exchange Market Intermediation Programme.
The move represents a significant escalation in the Central Bank’s strategy to stabilize the Ghanaian Cedi and enhance dollar liquidity on the interbank market.
According to a notice issued to dealers and traders at participating commercial banks, the BoG is poised to auction approximately $300 million twice a week throughout November. These sales will be conducted on a spot basis directly to licensed commercial banks.
This system replaces previous intervention methods and is central to the BoG’s new commitment to market transparency and efficiency.
The Central Bank clarified that while the November volume is set, subsequent monthly allocations will be determined by prevailing market conditions, allowing for flexibility in its interventions. It also reaffirmed its dedication to disclosing all relevant information regarding its foreign exchange activities.
The announcement comes as the Ghanaian Cedi records impressive gains. BoG data shows the Cedi appreciated by 13.9% against the US Dollar in October 2025 and an aggregate 34.86% year-to-date increase.
Commercial banks have largely credited this recent rally to the Central Bank’s shift in policy, particularly the move from periodic intervention sales to regular, price-competitive spot auctions. This policy adjustment, supported by the Ghana Association of Banks, is reported to have significantly enhanced market efficiency and improved the consistent supply of foreign currency.
Currently, the interbank market maintains an average daily trading volume of $22 million, contributing to a total monthly volume of $484 million.
The FX intermediation initiative commenced in October 2025, initially tied to the Domestic Gold Purchase Programme, with planned sales of up to $1.15 billion per month.
BoG Governor Dr. Johnson Asiama had previously detailed the auction format: open to all licensed banks, conducted on a spot basis, and critically, without conditions or earmarking for allocations, ensuring a transparent and level playing field.
“Monthly auction volumes may be adjusted depending on evolving market conditions, but our overarching objective remains clear: to deepen the interbank FX market, enhance price discovery, and smooth volatility,” Dr. Asiama noted during a stakeholders’ engagement.
The reforms ensure that the BoG’s intervention is executed in a market-neutral manner, with twice-weekly, open, price-competitive auctions becoming the new standard for dollar supply.
Source:NKONKONSA.com
