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The Bank of Ghana (BoG) has introduced a new Foreign Exchange (FX) Operations Framework aimed at enhancing transparency, strengthening market confidence, and ensuring greater stability in the country’s foreign exchange market.
The framework, approved by the BoG Board, represents a major policy shift that clarifies the objectives, principles, and operational procedures guiding the central bank’s FX interventions. It adopts a rule-based “discretion-under-constraint” approach, ensuring that interventions are conducted based on transparent, pre-announced criteria rather than on an ad-hoc basis.
In a statement issued on Tuesday, the Bank said the new framework reinforces its commitment to macroeconomic stability under its inflation-targeting mandate, while maintaining a flexible, market-determined exchange rate regime.
Under the framework, the BoG’s FX operations will focus on three core objectives:
- Reserve Accumulation – building buffers against external vulnerabilities.
- Volatility Management – reducing excessive short-term fluctuations without fixing the exchange rate.
- Market-Neutral Intermediation – transparently channelling FX inflows, including from the Gold Purchase Programme and export surrender requirements, into the market without influencing the currency’s long-term trend.
A key innovation of the framework is its rule-based and transparent auction system. The BoG will now conduct competitive, variable-rate, fixed-amount auctions for FX transactions to ensure fairness and efficiency. Auction amounts will be pre-announced, and results published the same day.
To promote accountability, the central bank will also publish aggregated monthly FX operations data within five business days after each month’s end, clearly distinguishing between different operational objectives. This is expected to provide market participants and the public with greater insight into BoG’s actions and foster confidence in the FX market.
“This new FX Operations Framework reflects our commitment to transparency, market confidence, and macroeconomic stability. By clarifying our objectives and processes, we aim to strengthen resilience while preserving the flexibility of Ghana’s exchange rate regime,” the Bank said in its statement.
The rollout of the framework comes at a time when the Ghana cedi has emerged as one of the best-performing currencies in sub-Saharan Africa, supported by prudent monetary policy management and consistent foreign exchange inflows.
