Bank of Ghana Launches Transparent FX Operations Framework to Boost Market Confidence

The Bank of Ghana (BoG) has introduced a new Foreign Exchange (FX) Operations Framework aimed at boosting transparency, reinforcing market confidence, and ensuring stability in the country’s FX market. Approved by the BoG Board, the framework represents a significant policy shift, clarifying the objectives, principles, and processes guiding the central bank’s interventions in the foreign exchange market.

Central to the framework is a rule-based “discretion-under-constraint” approach, which replaces ad-hoc measures with transparent, pre-announced criteria. This ensures that every intervention in the FX market is guided by clear rules, reflecting the BoG’s commitment to macroeconomic stability under its inflation-targeting mandate, while maintaining a flexible, market-determined exchange rate.

The framework targets three core objectives: building foreign reserves to protect against external shocks, managing short-term currency volatility without fixing the exchange rate, and channeling FX inflows—such as from the Gold Purchase Programme and export surrender requirements—into the market transparently, without influencing long-term currency trends.

A key feature of the new system is competitive FX auctions, where variable-rate, fixed-amount transactions will be announced in advance and results published the same day. To strengthen accountability, the BoG will also release aggregated monthly FX operations data within five business days after each month, clearly distinguishing operational objectives to provide market participants with insight into the central bank’s actions.

The timing of this launch is significant, coming as the Ghana cedi has emerged as one of the best-performing currencies in sub-Saharan Africa. Strong policy management, consistent FX inflows, and now the new transparent framework are expected to further bolster investor confidence, enhance resilience, and support sustainable growth in the country’s foreign exchange market.

source: citi newsroom