WHAT IS FX INTERVENTION?

FX intervention happens when the central bank sells foreign currency to:

• Stabilize the cedi
• Meet import demand
• Calm market volatility

THE SIMPLE FORMULA

FX Intervention = FX Inflows – Change in Reserves

If inflows are big but reserves rise only a little, the rest was sold into the market

WHAT HAPPENED TO RESERVES?

Ghana’s reserves moved as follows:

• Dec 2024: US$9.11bn
• Mar 2025: US$10.30bn
• Jun 2025: US$11.34bn
• Sep 2025: US$11.60bn
• Oct 2025: US$11.41bn

Net increase: US$2.30bn

EXPORTS BROUGHT IN BIG FX

Total exports (Jan–Oct 2025): US$23.33bn

• Gold: US$15.25bn
• Cocoa: US$2.82bn
• Oil: US$2.20bn
• Others: US$3.06bn

REMITTANCES & CAPITAL FLOWS

• Private transfers (remittances): ≈ US$6.5bn
• Net financial inflows (excl. reserves): ≈ US$1.92bn

TOTAL FX INFLOWS

Add everything together:

US$23.33bn + US$6.50bn + US$1.92bn
= US$31.75bn

This is the FX Ghana earned in 2025 (Jan–Oct).

IMPORTS MUST BE PAID

Total imports (Jan–Oct 2025): US$14.80bn

• Oil imports: US$4.40bn
• Non-oil imports: US$10.40bn

FX LEFT AFTER IMPORTS

US$31.75bn – US$14.80bn
= US$16.95bn

This surplus could only:

• Build reserves, or
• Be sold into the FX market

BUT RESERVES ROSE BY ONLY…

Reserves increased by just US$2.30bn

So where did the rest go?

US$16.95bn – US$2.30bn
= US$14.65bn sold into the market

ADJUSTING THE NUMBERS

Not all FX can be used freely due to:

• Encumbered assets
• Gold price revaluation
• Petroleum & heritage funds

A standard 30–35% adjustment applies.

THE FINAL ESTIMATE

US$14.65bn × 0.68
= US$9.96bn

Estimated FX intervention: ≈ US$10 billion

DOES THE EXCHANGE RATE AGREE?

USD/GHS movement:

• Jan 2025: 15.30
• May 2025: 10.28
• Jul 2025: 10.50
• Sep 2025: 12.42

That’s a 33–43% appreciation.

WHY THIS MATTERS

Such appreciation cannot happen:

• With weak portfolio inflows
• Without capital account liberalization
• Without massive FX supply

This was intervention, not market magic

FINALLY

Ghana earned strong FX in 2025
But instead of saving it all, about US$10 billion was used to stabilize the cedi. Short-term stability came at a big cost.

Author:

Prof. Isaac Boadi

Dean, Faculty of Accounting and Finance, UPSA

Executive Director, Institute of Economic and Research Policy, IERPP