Cedi Surge May Alter IMF Ghana Program - IMF Communications Director Kozack Reveals

The International Monetary Fund (IMF) has indicated that Ghana's unexpected currency gains may require adjustments to its $3 billion Extended Credit Facility programme, following the cedi's remarkable 18% appreciation against the US dollar in the first half of 2025.

IMF's Cautious Response
At a Washington press briefing on Thursday, IMF Communications Director Julie Kozack acknowledged the cedi's performance while emphasizing the need for careful analysis:

"While Ghana's recent exchange rate developments are encouraging, we're closely monitoring whether this appreciation reflects durable changes in fundamentals. The mission team will assess potential implications for programme targets during the next review."

The statement came in response to specific questioning by JoyBusiness about whether the currency's strength would lead to softened fiscal targets under the IMF programme.

Behind the Cedi's Rally
Financial analysts attribute the appreciation to:

• Debt Restructuring Success: Completion of $5.4 billion bilateral debt reprofiling under G20 Common Framework

• Investor Confidence: Improved sovereign risk ratings following Q1-2025 Eurobond issuance

• Central Bank Measures: Aggressive FX interventions and tightened monetary policy

Potential Programme Adjustments
Sources suggest these areas may be revised:

1. Inflation Targets: Current 8% year-end goal may be eased given disinflationary currency effects

2. Reserve Accumulation: $6 billion gross reserve target could increase to sterilize excess liquidity

3. Fiscal Adjustments: Primary surplus requirements may be recalibrated

Market Reactions

• Bond Markets: Yield on Ghana's 2037 Eurobonds fell 120bps since January

• Business Sector: Importers report 15-20% cost reductions, but exporters fear competitiveness erosion

• Central Bank: Maintains cautious stance, warning against "overshooting" risks

In The Meantime?
An IMF team is scheduled to arrive in Accra in August for the sixth programme review, where revised targets could be formalized. Economists warn that sustained appreciation depends on maintaining recent policy discipline.

Expert Quote:
"Currency gains are welcome, but Ghana must avoid the Dutch Disease trap," cautioned Dr. Kwame Owusu of the Institute of Economic Affairs. "The IMF's caution is justified – we need organic growth, not just FX market technicalities."

Source: Myjoyonline.com