On August 14, 2025, the World Bank cautioned the Bank of Ghana (BoG) to desist from large-scale foreign exchange (FX) interventions, warning that such actions risk distorting the market and undermining the country’s economic resilience.
In its latest Ghana Economic Update released in Accra on Thursday, the Bank stressed that Ghana’s exchange rate policy must give market forces a greater role in determining currency movements.
“FX interventions by the BoG should be managed carefully to avoid distortions in the currency market and allow for a more flexible exchange rate regime” the report said.
While acknowledging the central bank’s efforts to stabilise the cedi and strengthen reserves, the World Bank maintained that over-reliance on FX market interventions could backfire by creating artificial stability that is unsustainable in the long term.
The report also pressed for urgent reforms in the banking sector, calling for the swift recapitalisation of all financial institutions in line with the Financial Sector Strengthening Strategy (FSSS). “Completing the recapitalisation of all financial institutions in line with the FSSS, will enhance the financial health of the banking sector”, it said.
A central recommendation was the need for a comprehensive asset quality review to tackle Ghana’s high levels of non-performing loans (NPLs). “A comprehensive asset quality review is needed to guide the high level of non-performing loans, with clear bank-specific action plans provided to banks for resolution”, the report stated.
According to the World Bank, these measures are essential to rebuilding trust in the financial sector and supporting broader economic recovery. “These measures will rebuild confidence and position the banking sector to better support Ghana’s recovery” it added.
The update comes as Ghana continues to implement reforms under its IMF-supported programme, which targets restoring macroeconomic stability and promoting sustainable growth.
The World Bank’s caution on FX interventions reflects concerns that while currency stabilisation is important, the long-term health of the economy depends on deeper structural reforms particularly in the financial sector to improve resilience against external shocks.
