Bank of Ghana Governor Dr. Johnson Asiama moved quickly to reassure markets after the cedi’s sharp three-day slide last week, calling the depreciation temporary rather than systemic.
The local currency weakened dramatically from August 27 to 29, falling from roughly ₵10.98 to ₵11.26 against the dollar. The pound and euro followed similar patterns, dropping ₵0.40 and ₵0.34 respectively during the same period.
Business confidence wavered as import costs surged and households faced higher prices for foreign goods. Questions emerged about whether the central bank was losing control after months of relative currency stability.
Dr. Asiama attributed the pressure to seasonal factors rather than structural problems. The timing coincides with the pre-cocoa harvest period, when foreign exchange markets typically experience strain before major export revenues arrive.
“If you look at it historically, before the onset of the cocoa season, you always found this type of pressure in the FX market,” the governor explained in a recent interview. He emphasized that adequate foreign reserves remain available to cover Ghana’s international obligations.
The central bank chief highlighted upcoming cocoa financing worth over $4 billion as a key stabilizing factor. These pre-financing arrangements with international buyers typically provide crucial dollar inflows during harvest season, easing pressure on the exchange rate.
Import declaration system abuses have contributed to current strains, Asiama acknowledged. The central bank is addressing these regulatory gaps to prevent further exploitation of foreign exchange allocation mechanisms.
Ghana’s external position remains fundamentally sound despite recent volatility, according to the governor. Net international reserves haven’t been depleted, and the underlying economic factors supporting previous cedi stability persist.
The currency weakness has heightened concerns about import-dependent sectors, particularly as businesses calculate costs for the final quarter. Rising fuel and raw material prices could filter through to consumer goods if depreciation continues.
Remittance flows and other foreign exchange sources should complement cocoa revenues in restoring market stability, Asiama suggested. The combination of multiple inflow streams typically strengthens the cedi during peak agricultural export periods.
Market analysts remain divided on whether current pressures reflect temporary seasonal effects or deeper structural challenges. Recent International Monetary Fund program compliance has helped stabilize Ghana’s external accounts, but global economic uncertainty continues affecting emerging market currencies.
The governor’s intervention aims to prevent panic selling that could accelerate depreciation beyond economic fundamentals. Currency markets often respond to perception as much as underlying conditions, making central bank communication crucial during volatile periods.
