Dr. Zakaria Mumuni, the First Deputy Governor of the Bank of Ghana, has asserted that the recent appreciation of the Ghanaian cedi is not only a significant turnaround from last year’s performance but also an extraordinary achievement since the country adopted a flexible exchange rate system.
“Year to date, we’ve had the cedi appreciating by over 12%—specifically 12.2%,” he stated during an appearance on PM Express Business Edition. “In contrast, at the same time last year, we experienced a depreciation of approximately 13%. This marks a complete reversal of the previous situation.”
Describing the cedi’s resurgence as “perhaps unprecedented,” Dr. Mumuni credited this positive shift to a decisive and effective combination of policies implemented by the central bank in recent times.
“If you examine the data from the inception of the floating exchange rate regime until now, this is the only instance within the first four or five months that we have witnessed such a robust performance of the Ghana cedi,” he remarked.
He underscored that the turnaround is primarily influenced by domestic policy rather than external factors. “The domestic elements carry more weight in this performance than the external ones,” he noted. “This development is a direct reflection of the careful mix of policies currently in place.”
A crucial aspect of this strategy involved the Bank of Ghana’s decision to increase interest rates and tighten monetary policy—moves that initially faced public criticism. “When we raised the policy rate, many, including GUTA, expressed their dissatisfaction,” he recalled. “There were numerous comments and analysts were not pleased. However, we were fully aware of our intentions—and the results are beginning to manifest.”
Dr. Mumuni highlighted the Bank’s proactive liquidity management as vital to the disinflation process. “We tightened monetary policy to recalibrate the disinflation trajectory,” he explained. “This approach is proving effective, and we are executing it through our open market operations.” He also noted that the earlier increase in the cash reserve ratio contributed to absorbing excess liquidity in the system.
“That has already helped to sterilise some cedi liquidity,” he added.
The official’s comments reflect the central bank’s increasing confidence that its stringent yet necessary measures are beginning to yield positive outcomes. He believes the cedi’s strong performance serves as evidence that policy discipline and effective market management are starting to restore credibility to Ghana’s macroeconomic framework.
