Deputy Managing Director of the International Monetary Fund Bo Li has entreated the Bank of Ghana (BoG) to limit its intervention in the country’s foreign exchange market.

The IMF prefers a more market-driven exchange rate, where the value of the cedi is largely determined by supply and demand rather than the central bank draining its forex reserves.

The Ghanaian authorities have made significant strides toward rebuilding international reserves. Nonetheless, the IMF has called for a limited direct involvement.

“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,” Bo Li said.

The Bank of Ghana has tightened its monetary policy stance to sustain a continued reduction in inflation and has been successful in rebuilding international reserves. The BoG has implemented risk containment measures to support banking system stability.

"It appropriately intensified monitoring and escalated measures at weak, undercapitalized banks to promote timely recapitalization; strengthen risk management frameworks and practices, including to reduce NPLs; and ensure effective governance. Looking ahead, the authorities are committed to sustaining their efforts to bolster financial stability," the Fund revealed.

Ghana is set to receive US$367 million (SDR 267.5 million) from the International Monetary Fund (IMF) under its three-year US$3 billion program, bringing Ghana’s total disbursements under the arrangement to about US$2.3 billion.

This comes after the Executive Board of the International Monetary Fund (IMF) on July 7 completed the fourth review of the US$3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board in May 2023.

Deputy Managing Director Bo Li said the authorities are strongly committed to restoring fiscal discipline and addressing the structural weaknesses that led to the slippages.

She, however, added that “This should be supported by continued efforts to enhance domestic revenue mobilization and streamline non-priority expenditure, while creating space for development priorities and enhanced social safety nets.”

In April, the IMF staff and the Ghanaian authorities reached a staff-level agreement on the fourth review of Ghana’s economic program. According to the IMF, the country's economic recovery prompted the staff-level agreement and subsequent disbursement.

Ghana's growth in 2024 and the first quarter of 2025 was higher than expected, reflecting robust activity in the mining, agricultural, ICT, manufacturing, and construction sectors, the Fund noted.

"The external sector has seen considerable improvement, driven by solid exports—particularly gold and to a lesser extent, oil—and higher remittances. As a result, the accumulation of international reserves has far exceeded the ECF-supported program targets."

Notwithstanding, Ghana’s performance under the IMF-supported program deteriorated significantly at the end of 2024.

"Preliminary fiscal data point to slippages in the run-up to the 2024 general elections, on account of a large accumulation of payables. Inflation exceeded program targets—though recent data points to renewed rapid disinflation. Several reforms and policy actions were delayed across the fiscal, financial, and energy sectors," the IMF noted.

In light of this, the current administration, led by President John Mahama, has adopted strong corrective measures to address the fiscal impact of 2024 slippages and ensure the fiscal program remains on track, including achievement of a 1½ percent of GDP fiscal primary surplus in 2025.

The Fund indicates that this will be achieved through additional revenue mobilization and expenditure rationalization—while protecting the vulnerable from the impact of policy adjustment.

Creating an environment more conducive to private sector investment and enhancing governance and transparency remain key to boosting the economy’s potential and underpinning sustainable job creation, according to the Fund.

The Ghanaian authorities have also continued to make headway on their public debt restructuring. The Memorandum of Understanding (MoU) with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework has been signed by all parties, and the focus is now on finalizing the bilateral agreements to implement the MoU.

The authorities are also pursuing good-faith efforts toward reaching agreements with other commercial creditors on debt treatments that are in line with program parameters and the comparability of treatment principles.

Against the backdrop of these policy actions and the progress on debt restructuring, Ghana’s credit rating has been upgraded by key international credit rating agencies. Fitch has upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘Restricted Default’ to ‘B-’ with a Stable Outlook.

Fitch credited the upgrade to the country's successful restructuring of $13.1 billion in Eurobond debt, steady fiscal consolidation, and the country’s improving macroeconomic outlook.

The agency also highlighted falling inflation, a strengthening cedi, and a rebound in investor confidence as key indicators of Ghana’s economic turnaround.

The Fund insists that staying the course of macroeconomic policy adjustment and reforms is essential to fully and durably restore macroeconomic stability and debt sustainability, while fostering a sustainable increase in economic growth and poverty reduction.