The Institute of Economic and Research Policy Promotion (IERPP), says it has been vindicated by the IMF's expression of concern and caution to the government over its control of the stability of the Cedi.

The Executive Board of the IMF, in its fourth review under the Extended Credit Facility Arrangement with Ghana, expressed concern about how the government has been pumping in forex to support the Cedi against major currencies, instead of allowing market factors to determine the stability of the local currency.

“The Bank of Ghana should maintain an appropriately tight monetary stance until inflation returns to its target, reduce its footprint in the foreign exchange market, and allow for greater exchange rate flexibility, including by adopting a formal internal FX intervention policy framework,'' wrote the IMF in its review.

In a statement signed by its Executive Director, Prof. Isaac Boadi, who is also the Dean, Faculty of Accounting and Finance, UPSA, the IERP said it offered a similar caution to the government but its advice fell on deaf ears.

Read also: Reduce interventions in the forex market – IMF to Bank of Ghana

According to the IERPP, these warnings from IMF do not validate but vindicate its concerns that "the government was deliberately injecting large amounts of dollars into the system to prop up the cedi’s value.''

“While this may make the currency look stable in the short term, it distorts market dynamics, encourages cheap imports, and hurts local production — a toxic combination for long-term economic health.”

“To date, BoG has not adopted a clear, published FX intervention framework. Its market operations remain ad hoc and opaque, leading to uncertainty and speculation. Instead of allowing the exchange rate to reflect actual market forces, the BoG continued aggressive dollar sales, particularly during sensitive periods. This short-term tactic masked deeper economic issues, exactly what both institutions cautioned against.”

“Despite these aligned warnings, the actions taken by the BoG and government show a clear disregard for both the IMF and IERPP advice."

Below is the full statement by the IERPP: