Tano North lawmaker Gideon Boako has rejected claims that foreign exchange sales of about $3 billion under the country’s IMF programme disprove the existence of an $80 million monthly cap on direct central bank intervention.
Boako, a Deputy Ranking Member of Parliament’s Finance Committee, said the argument conflated different foreign exchange operations conducted by the Bank of Ghana.
In a Facebook post on Saturday, 29 August, he said the Bank of Ghana had agreed with the International Monetary Fund on a monthly ceiling for direct FX intervention, initially set at $80 million and later reduced to $60 million.
“As part of the program conditionalities to rebuild Ghana’s international reserves to agreed thresholds, the IMF and the Bank of Ghana agreed on a strict monthly budget for direct FX intervention capped at $80 million and subsequently scaled down to $60 million,” he said.
Boako said the restriction was adhered to by the previous government and helped Ghana exceed its reserve accumulation target by the end of 2024.
“That overperformance is what gave the IMF the comfort to relax the cap and allow the current government to intervene beyond the $80m/$60m limit,” he said.
His comments follow renewed debate over former vice president Mahamudu Bawumia’s explanation of the foreign exchange constraints that influenced the introduction of Ghana’s Gold-for-Oil programme and other measures during the country’s economic crisis.
Critics have pointed to an approximately $3 billion foreign exchange sales figure contained in an IMF programme review, arguing that the amount would imply average monthly intervention far above the alleged cap.
Boako rejected that interpretation, saying the figure covered several categories of Bank of Ghana foreign exchange operations.
“The $3 billion figure confuses FX Auction with FX Intervention,” he said.
According to Boako, the central bank operates separate budgets for foreign exchange auctions and direct intervention, while recent IMF reports also include an intermediation budget.
He described foreign exchange auctions as pre-announced and rules-based, while direct intervention is discretionary and aimed at smoothing volatility in the market.
“Both together make up the total FX sales figure reported,” he said.
“Adding up auction, intervention (+ now Intermediation) is what gives you the total $3 billion,” he added.
Boako therefore disputed calculations that divide the $3 billion figure by 12 months to arrive at an average monthly intervention of about $250 million.
“It is therefore wrong to divide $3 billion by 12 and call it proof of intervention,” he said.
The lawmaker also addressed why the alleged intervention cap may not appear explicitly in publicly available IMF documents.
He said specific intervention limits could be treated as market-sensitive information because disclosure could affect market behaviour and expose the currency to speculative pressure.
“You will therefore not find the cap explicitly stated in the published staff report. Its absence in the report does not mean it did not exist,” he said.
Boako said the distinction between total foreign exchange sales and direct intervention was essential to understanding the IMF programme and the circumstances surrounding Ghana’s foreign exchange management during the economic crisis.
Editor:
Obiri-Yeboah
