Prof. Bopkin backs IMF call for BoG to ease Forex market controls
9th July 2025
Finance expert Professor Godfred Bopkin has endorsed the International Monetary Fund’s (IMF) recommendation that the Bank of Ghana (BoG) scale back its interventions in the foreign exchange market, warning that excessive control is distorting pricing mechanisms and undermining market efficiency.
His remarks come in the wake of the IMF Executive Board’s latest review of Ghana’s ongoing bailout programme, which led to the release of a $367 million tranche. As part of its recommendations, the IMF urged the government to allow the foreign exchange market to operate with greater freedom.
Speaking on Joy FM’s Super Morning Show on Wednesday, July 9, 2025, Professor Bopkin explained that the BoG’s dominant role in setting exchange rates has stifled the natural process of price discovery, whereby currency values are determined by the forces of supply and demand.
“In a properly functioning market, prices should reflect the balance between demand and supply. But when the central bank becomes the main player, price signals reflect policy decisions rather than actual market conditions,” he noted.
He cited the growing divergence between the official exchange rate and those quoted by forex bureaus and informal traders. While commercial banks are currently offering the U.S. dollar at approximately GH¢10.10, forex bureaus are charging nearly 20% more, with black market rates exceeding the official price by up to 35%.
“This gap signals a lack of confidence in the official exchange rate,” Professor Bopkin said. “Market participants are increasingly relying on parallel rates, believing that the central bank’s rate does not represent true economic fundamentals.”
While acknowledging that the BoG’s interventions may offer short-term stability, he warned that continued distortion of market signals could lead to long-term economic instability.
The IMF’s stance, he explained, is geared toward restoring credibility in Ghana’s forex market and eliminating multiple exchange rates, which obscure transparency and discourage formal economic activity.
Professor Bopkin concluded by urging policymakers to align market operations with economic fundamentals, arguing that this would help rebuild trust, attract investment, and ensure the cedi reflects its true market value.