BoG describes current pressure on the cedi as a temporary blip | Business Live (25-5-26)

Added: 2026-05-26

[00:00:00]Hello, good evening, everyone. Welcome to Business Live. Coming up in this bulletin, Bank of Ghana Governor, Dr. Johnson Asiama, describes current pressure on the CD as a temporary blip as he announces plans to build more reserves.

[00:00:12]Well, it's not surprising at all. Um we are doing everything we can >> [music] >> uh to stem excessive volatility.

[00:00:20]The good part of it all is that [music] we have the buffers.

[00:00:25]But why is the CD still under pressure?

[00:00:27]We shall be finding out soon. Also in this bulletin, IC Insights forecast inflation will continue upward after the Monetary Policy Committee of the Bank of Ghana held its rate at 14%.

[00:00:39]Plus, next Joy Business Roundtable comes off tomorrow [music] with a focus on Ghana's extractive industry.

[00:00:48]We have details of these and more for you. Please stay.

[00:00:58]>> [music] [music] [music] >> Thanks so much for your time. I am Pius Kwojo Bakah. I look forward to our stories. Governor of the Bank of Ghana, Dr. Johnson Asiama, has described the current pressure on the CD as a temporary blip, hence no need for businesses to panic. This is coming at a time when the CD's depreciation against the dollar has reached more than 8% with Reuters describing it as the worst performing currency in Africa. But speaking at the last monetary policy committee briefing, the governor said that he expects the seasonal pressures to normalize soon.

[00:02:17]First of all, we have always said it that the framework we have is a managed float. It's not a fixed exchange rate regime.

[00:02:25]So, the CD is expected to move, all right? On a daily basis, expect the CD to move. It can depreciate, it can appreciate.

[00:02:35]Our concern is to avoid excessive volatility, right? So, we haven't, you know, announced that we are keeping a fixed exchange rate. It's okay for the CD to be flexible.

[00:02:48]Now, it is true. We've observed a surge in demand, an increase in demand in in recent weeks. Uh but remember the times we are in. The geopolitical, you know, disturbances out there and its impact in terms of oil prices, you know, trade disruptions here and there.

[00:03:07]What that means is the same volume of crude oil is costing about twice more by way of foreign exchange. So, you can you can imagine why there's greater demand on on on effects or therefore some depreciation pressure on the CD.

[00:03:23]Then remember the seasonal impacts as well. You know, we are in the month of May, April, May.

[00:03:29]This is when banks and other companies, you know, publish their accounts. This is when dividend payments are being made, you know, to other countries. When those dividends are being sent out, they don't send CDs. They want to send US dollars. And and it's the same demand, it's the same exchange rate that's to, you know, take the impact. So, it's not surprising at all.

[00:03:53]We are doing everything we can to stem excessive volatility.

[00:03:58]The good part of it all is that we have the buffers we are building on a daily basis.

[00:04:04]At times you might see the buffers a little, you know, deep. It doesn't mean anything has gone wrong. Remember, it's it's on a daily basis, you know, our trade account is is is is, you know, is is improving. And so, so long as we have the buffers, so long as we continue to add, it doesn't matter. The CD, let it float. Let it move.

[00:04:27]What we will we will ensure is that we won't see a return to the kind of volatility we saw in a number of years past.

[00:04:38]Professor Patrick Asuming is an economist. He joins us via Zoom for a thorough conversation on the back of this. Thank you very much, sir, for making time to join us here on Business Live. And you heard the BOG say that, well, there is enough reserve, but the CD is still under pressure. For all that we know, is it's demand dollar demand driven from importers, corporate repatriation, etc. What really is the situation?

[00:05:01]Good evening, Pius. Good evening to viewers, and thanks for having me.

[00:05:05]Yes, I I I think largely, you know, what the government is saying is what you expect in the in this second quarter.

[00:05:16]You you begin You know, this is the time where foreign businesses have to repay have to report their financials and then pay dividends. And that that pressure usually comes.

[00:05:28]And then, we've also seen what's happening in the connected to the streets of our moose and what's happening to oil prices. It will be The oil prices that we are seeing will probably be higher than what they would have run for at the beginning of the the year. But, so I think in that sense to the extent that the depreciation is generally under control. It's under control in the sense that this is not like where we see massive swing in a short period of time. That's always where where the problem is, where in a 1 month 2 week period you see a sharp depreciation and then sometimes some small correction follows. I think that's where it's it's problematic.

[00:06:13]You also have to look at the reserve position.

[00:06:15]Even though between uh March and April, if you look at the the current economic the recent the summary of economic and financial data, there's a small depart we are still in such a strong position to be able to defend the CD.

[00:06:30]Let's not forget that even with the depreciation, the CD is still trading within the 10 and 1/2 and 11 and 1/2 band.

[00:06:40]But, within that band if you move from 10 and 1/2 to 11 and 1/2, it's still a substantial depreciation. So, I I I think it's it's something that is not is not out of control and I think the central bank has a reserve to deal with that. And, like you said, they're allowing the currency to float within a small band.

[00:07:01]But, it beats my imagination if indeed like the bank governor is saying that we have adequate reserve, why isn't that reassuring the market? Is it credibility issue, timing of interventions, what is it?

[00:07:15]I I don't think it's a credibility issue. I think when you look at the the the reserve position and you look at the liquidity of the assets. Don't forget that uh towards the end of last year, the BOG sold some of the gold and converted into dollars.

[00:07:32]So, you know, they really shouldn't have the but what you have to understand is that at some point last year to ensure transparency in the central Bank's forest operations.

[00:07:43]The BoG board approved a new framework.

[00:07:47]That framework has more predictability and transparency on forest operations.

[00:07:52]So, it means that you can't just uh you know, small pressure and start pumping more dollars. So, I think the new framework that has come in, it brings more predictability on when the forex trans- uh operations take place.

[00:08:07]And that means that they don't just move uh every time there's small pressure. I I I think that is where perhaps they're a little bit They have followed the framework. They have to follow some guidelines on how they intervene in the market or how Well, as they would call it, how they intermediate in the market. I think that's where it appears that there's some lag and therefore some the additional pressures on the demand side seem to be causing the the depreciation. I see. So, from what you said, at what level of reserves um or CD depreciation does this become a stability risk? Um what would force BoG to change course?

[00:08:45]I don't I don't I don't think they are going to change course necessarily.

[00:08:49]They under the new framework, they have to have a planned and transparent and pre-announced schedule.

[00:08:56]And some amount for how they are going to intermediate.

[00:09:00]So, if they feel that, you know, uh let's let's step back and put this in context.

[00:09:08]8% is 8.4% depreciation year-to-date.

[00:09:13]It seems quite high because last year we saw last year this time we saw this massive appreciation of the currency.

[00:09:23]Now, if you compare to average for the last three or four years, it's not you know, it's not out of it's it's not extraordinary. 8.4% depreciation is not a high.

[00:09:36]But, I think the uh the thing about the currency movement is that because we start at say 10.8 or 10.5, even if the currency moves to about 11.2, the depreciation rate will look a little high. But, you're being classified as the worst-performing currency in Africa.

[00:09:56]>> [clears throat] >> I I I don't want to put I don't want us to put too much premium on that because it is relative classification.

[00:10:05]And, you know, if every other currency has performed relatively well, then obviously yours look uh a little worse. But, it seems like this is one of those situations where you know, we have we have the reserves.

[00:10:21]And, but we've come up with a framework, and this is one of the disadvantages of the framework. In time past, the the BoG would have readily intervened >> intermediated, and then it will come.

[00:10:31]But, now we have to follow some we have agreed to follow some set of guidelines on how we how we do the forest operations. And so, it seems like that is where there's some friction.

[00:10:42]And that's where you are seeing the scent of depreciation that you are currently seeing.

[00:10:46]>> So, at what point can the BoG intervene?

[00:10:49]I don't think they stopped their intervention. I don't think they So, what I'm trying to say is that they have to follow a pre-announced schedule and an amount. Do you they can't just get up This is where the problem came last year, where they could, especially the first and second quarter of last year, there was so much intervention.

[00:11:10]They would call it intervention or whatever. That brought the city where it was. Yeah.

[00:11:14]So, that kind of massive uh BoG activity in the forest market is what brought us to a stage where you they said, "Okay, now you have to follow some set of guidelines on when you do the operations and how much we do." So, you can't just get up and decide to, you know, intervene as and when you please. All right. Thank you very much, Professor Patrick Asuming. I'm always delighted to have you here on Business Life, grateful service. Now, let's stay a while longer on the economy because leading research firm IC Insights has stated that the Bank of Ghana's latest policy rate holds confirm its long-standing view that inflation is set to commence an upward trend above 6%. More in this report.

[00:11:53]IC Insights, however, pointed out that the continued fiscal discipline, relative exchange rate stability, and lower value added tax rate will cap inflation below 10% by the end of 2026, underscoring the rate hold decision. The Bank of Ghana's Monetary Policy Committee voted by a majority decision to leave the policy rate unchanged at 14% during its May 2026 meeting, being the first rate hold decision in exactly a year. According to IC Insights, the decision aligns with its call for a rate hold at this MPC meeting, which it expressed in its April 2026 inflation rate.

[00:12:30]This is still Business Life. We have more for you after this break.

[00:12:55]Hello everyone, welcome back to Business Life. The next Joy Business Round Table comes off tomorrow on the Joy News channel at 10:00 a.m. And the program will focus on Ghana's extractive industry and the need to reassess the ownership of structure of mineral resources in the country. We have more for you in this report.

[00:13:12]The high-level discussion will be held on the theme, to nationalize or transform, rethinking Ghana's approach to mining, oil, and critical minerals.

[00:13:24]The program will bring together voices from industry, policy, academia, and governance. The panel will be made up of Engineer Dr. Kenneth Ashigbey from the Ghana Chamber of Mines, Wisdom Kuwornu Lamptey of the Ben Enwonwu Commission, Dr. Edu Owusu-Ansah Kodwo of the Center for Policy Scrutiny, Dr. Frank Boateng, Acting Director of the Institute of Mineral Resource Investment and Governance at the University of Mines and Technology, and Gideon Ayee Owoo, Partner and Resources and Industry Expert at Deloitte Africa. The dialogue aims to move beyond rhetoric. This initiative is part of Joy Business's commitment to shaping Ghana's economic conversation. The program will be moderated by host of the Super Morning Show, Winston Amoah. The dialogue airs live on Joy News TV, Joy FM, and Joy News social media handles.

[00:14:13]Nana Osei Kojo Akufo-Addo is the head of Joy Business, my boss, and he joins me in studio to speak to us about what's happening tomorrow. Nana, thank you very much for joining me here on Business Life. First off, why is this discussion important?

[00:14:25]Well, um I think that the issue of of of the extractive industry is is being generating some um debate for some time now. And and actually, it's it didn't start now. You can actually trace the this push for nationalization all the way back to the post-independence um era for many of the African countries where they felt that after gaining independence, they needed to have sovereignty over their their mineral resources. So, we have um examples in in East Africa, DRC, uh Zambia, for instance, having 51% stake in their copper. And and that's when also that's around the same time that Ghana also decided that, okay, then we needed to have um some stake. So, under um could uh uh General Acheampong >> Acheampong, yeah. I mean, Ghana had to acquire, I think about 55% stake in the Obuasi, um, mine, Ashanti, um, Goldfields.

[00:15:30]But, but then 10 years later in the '80s and '90s when many African countries having been devastated by by debt then had to liberalize and and then that's when also they were going through their structural adjustment program. So, there were a lot of privatization of, um, of some of the mining sector in in many African countries.

[00:15:55]Then, but fast forward 2009 onwards, then the push came back again. And, we even had African Union developing the Africa Mining Vision where they were, I mean, there there was a framework that was guiding African countries on how to make the best out of their mining industry and also, um, in terms of negotiating with, um, with foreign investment and all that. But, in Ghana, um, I just recently and and and you can actually even trace it to what has happened in the Sahel regions when, um, these, um, Mali, Burkina Faso began to also demand a better, um, benefits from their mineral resources.

[00:16:42]So, there's been this push and coincidentally the government's agenda is to have greater Ghanaian participation.

[00:16:51]>> Participation, that's local content.

[00:16:52]>> Exactly. In the extractive industry, that's where this debate has come up and, uh, fast forward just recently there's been a lot of talk. And so, that's where we have come from. All right. Um, and we felt that, no, we it's important that we have such a discussion. All right, so talk to us about the speakers, um, for for the main event tomorrow. Yeah, so we have, uh, Engineer Kenneth Ashigbey. He's the CEO of the Ghana Chamber of Mines Chamber of Mines. We have Wisdom Lamptey, he's a mineral economist. At the Minerals Commission, we have Dr. Edu Osu Saquadee. He is a policy analyst from the center of policy scrutiny. We have Dr. Frank Boateng from the University of Mines and at Tarkwa. And then we have Gideon Ayew, he's a partner and a resource and industry expert. He will be bringing in to the table um experience from other countries because it's important that we learn from what is happening elsewhere so that we can better shape the conversation going forward.

[00:17:57]>> Nana so after all said and done, what's the expected outcome?

[00:18:01]Well, so here at Joy Business, um we just don't want to engage in rhetoric.

[00:18:07]It's it's not just for talking and so we we discuss and at the end of it all, that's that's the end. What really we want to do is to shape the conversation.

[00:18:16]We know that the conversation is not ending now, especially where there's a lot of a lot of action from the government side and in in in in terms of regulating our extractive industry. We want to at the end of the day develop a policy brief Absolutely. that we can share with the government and also share with the general public and that becomes a reference point for the general public if they want to assess what the government is doing with the extractive industry. And ultimately >> Mhm. whatever happens with with the extractive industry has a bearing on all of us as Ghanaians. That's more reason why viewers and listeners would have to tune in and and listen and watch from wherever you are. It will be live on Joy 99.7 FM, live on Joy News here on this great channel, as well as our social media platforms. So do make a date with us and connect with us as well tomorrow.

[00:19:05]All right, thank you very much, Nana Biney.

[00:19:07]Now, let's touch on some other stories.

[00:19:09]Government has planned to partner with mining companies to develop local communities for the benefit of its citizens. And this is to ensure that Ghana maximizes gains from the sector as many question the development growth of mining communities across the country.

[00:19:23]Speaking to journalists after a breakfast meeting with the Ghana Chamber of Mines, Minister for Lands and Natural Resources, Emmanuel Amankwah hinted that there is no decision to nationalize mining in Ghana, but rather to partner for development. More in this report.

[00:19:37]The statement by the Minister for Lands and Natural Resources, Emmanuel Amankwah follows a recent call by some civil society organizations for government to localize mining ownership in Ghana.

[00:19:49]According to him, government has not made any decision to nationalize mining, but rather committed to have a partnership with multinational firms to develop the sector and ensure active participation of local communities. He explains in an interview after addressing a breakfast meeting with members of the Chamber of Mines Ghana in Accra. The government of Ghana has not fashioned out a blanket policy uh of nationalizing anything.

[00:20:17]But we deal with issues on case-by-case basis.

[00:20:23]Our goal is to make sure that we empower Ghanaians in the industry.

[00:20:30]We help build Ghanaian capacity. Our goal is to partner with investors who come to Ghana with the understanding that they are going to have a good return on their investment, but they will also leave behind expertise and help add value to our industry and make sure that the resource owners are empowered by the time they leave here. The Chamber welcomed the commitment from government and assured of adequate support to reform the sector. Chief Executive of the Chamber of Mines, Ken Ashigbey is positive that engagement with the state will be successful. We also believe that the local champions that you're creating today, the Ghanaian the national Ghanaian champions that you're creating today are tomorrow's multinationals. And so, if we don't ensure that the issues around security of tenure, the fact that we as a country would partner and coexist within with other international investors, then when national champions become ready and the next move they have to do is also go into other territories as multinationals, then that door is going to be closed to us. So, it is good to hear the minister give assurance and cement you know what government's position is.

[00:21:54]>> The breakfast meeting forms part of initiatives by the chamber and government to discuss pertinent issues concerning the sector.

[00:22:03]Now, government failed to meet its treasury bills target as demand was moderate. According to the auction results by the Bank of Ghana, the short-term instruments were under subscribed by 5.9%. Details in this report.

[00:22:16]Investors bought T-bills worth a little over 4.2 billion Ghanaian cedis as against the target of 4.48 billion Ghanaian cedis. The government, however, accepted about 3.9 billion Ghanaian cedis of the bid. The 91-day bill was once again the most subscribed bill as 2.52 billion Ghanaian cedis of the bid were tendered representing 59.8% of the total bid. The 182-day bill recorded bid of 877.72 million Ghanaian cedis. A little above 723 million Ghanaian cedis of the bid were accepted. For the 364-day bill, 817.12 million Ghanaian cedis of the bid were tendered. About 699 million Ghanaian cedis of the bid were accepted.

[00:22:58]Meanwhile, interest rates declined across the yield curve. The yield on the 91-day bill went down by one basis point to 4.91%.

[00:23:06]That of the 182-day bill remained unchanged at 7.04%.

[00:23:11]On the other hand, the yield on the 364-day bill dropped by two basis points to 10.37%.

[00:23:19]Thanks so much for being part of Business Live for today. I am Pius Kojo Bakarba. Feel free to log on to myjoyonline.com/business for all the business stories you need to know here in Ghana and beyond. Great for serving you.