The Price and promise of a solitary monetary policy

In 2025, Ghana's cedi posted its first annual gain against the US dollar in over three decades, marking a significant milestone in the country's monetary policy. This achievement came alongside a combined loss of GHS 34.95 billion for the Bank of Ghana (BoG), a first in the nation's history. Despite the losses, the cedi's strength and the Bank's efforts to stabilize it were noteworthy.

Headline inflation, which had reached a peak of 54.1 percent in late 2022, dropped to a more manageable 5.4 percent by the end of the year. Additionally, the Bank's international reserves surged to a record high of US$13.83 billion. However, the Bank also faced substantial losses, with its audited statements revealing a net operating loss of GHS 15.63 billion in 2025, up from GHS 9.49 billion in the previous year.

These financial figures, while concerning, are seen as the price of stabilizing the cedi in the absence of multilateral support. The modern international monetary system is built on a paradox: while capital flows freely across borders, central banks remain committed to national policies, leading to the absorption of misalignments on balance sheets.

In the past, coordinated interventions by major economies, such as the Plaza and Louvre Accords, have successfully stabilized currencies. However, a unilateral stabilizer like Ghana's BoG faces unique challenges. It must bear the full cost of its efforts, record them on its balance sheet, and maintain credibility through persistent commitment and external surveillance. This approach, while effective, comes at a heavy price, borne entirely by one institution.