BoG urges businesses to base Forex Decisions on economic fundamentals, not speculation

According to the central bank, transactions driven by genuine demand and underlying market conditions will help preserve the stability of the cedi and support broader macroeconomic recovery.

Speaking at the Money Summit, the Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, cautioned against speculative activities in the foreign exchange market, warning that such behaviour could undermine confidence and place unnecessary pressure on the local currency.

“The fundamentals of this economy do not reward speculation against our currency. I urge every actor, whether you are a bank, importer, exporter or investor, to transact based on genuine and present needs, not out of fear or panic,” she stated.

Mrs. Asante-Asiedu noted that Ghana’s international reserves continue to strengthen, providing an important buffer to support the economy and maintain stability in the foreign exchange market.

She said recent improvements in key macroeconomic indicators have contributed significantly to the cedi’s strong performance and helped restore confidence in the economy.

According to her, maintaining these gains will require responsible decision-making from businesses and market participants, particularly in the management of foreign exchange transactions.

Reflecting on developments in the currency market over the past year, she observed that those who engaged in speculative foreign currency holdings suffered losses as the cedi rebounded strongly.

“We all saw the lessons plainly last year. Those who bet against the cedi and hoarded foreign currency soon found themselves on the wrong side of the trade, unwinding at a loss as the currency staged one of the world’s strongest recoveries through 2025,” she said.

She added that many traders who initially held foreign currency eventually rushed to sell as the cedi strengthened, highlighting the risks associated with speculative behaviour.

The central bank believes that reducing speculative demand for foreign currency and allowing market fundamentals to guide economic decisions will help maintain exchange rate stability, ease inflationary pressures and strengthen the economy’s resilience.

The cedi has recorded one of its strongest performances in recent years, supported by improved foreign exchange inflows, stronger reserve buffers and growing confidence in Ghana’s economic outlook.