The First Deputy Governor of the Bank of Ghana, Dr. Zakari Mumuni, says the central bank is not using up reserves to support the cedi. He insists the recent gains are not artificial.

“If we were that heavy in terms of our support to the market, we would not be doing well with our reserves accumulation,” he said.

He described the market rally as credible and rooted in real confidence, dismissing speculation that the central bank is drawing down its buffers to defend the local currency.

“Unfortunately, if this were the case, market players who are very smart would have seen through it,” Dr. Mumuni said. “The rally would have been short-lived. They wouldn’t trust you.”

He said the central bank has actually been building reserves faster than anticipated.

“We are even accumulating reserves much, much faster than what has been expected,” he said. “And that is why the market really thinks this can be sustained.”

Dr. Mumuni stressed the quality of the reserves. “These are not debt-creating reserves,” he said.

“These are organically accumulated reserves. At the end of April, we had over $10 billion. We expect to hit $11 billion by the end of June.”

He said these figures are far above IMF targets. “The IMF program set a target of three months of import cover. We are now at 3.7 months using IMF metrics,” he said.

“If you include petroleum funds, we’re around 4.7 months. That’s quite a lot.”

He said this performance shows policy innovation.

“We have devised very strategic ways of meeting market demand while still accumulating external buffers,” he explained.

“What we are doing now places more weight on building reserves than on direct market support.”

He told Joy News that the approach has shifted. “This time is different,” Dr. Mumuni said.

He acknowledged that other factors also support the cedi’s strength.

“We’ve had a Staff Level Agreement with the IMF. That sent a strong message globally. It means things are changing.”

He pointed to disinflation. “Inflation dropped from nearly 24% to 21.2%. That’s progress,” he said.

“Fiscal consolidation is also taking shape. Public sector borrowing has slowed sharply compared to last year.”

He said the Bank of Ghana has taken deliberate steps to manage liquidity. “We’ve sterilised three times more than last year,” he said.

“So we’re keeping cedi liquidity tight while still meeting forex demand.”

He said all these efforts work together. “We are not intervening recklessly,” he said. “We’re building confidence, not burning reserves.”

He repeated the central point. “This is not smoke and mirrors,” Dr. Zakari said. “This is real. And we intend to sustain it.”