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 lift 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
