The foreign exchange market has remained relatively stable for the first six months of 2023, the Bank of Ghana has said.

It was supported by "positive market sentiments" derived from the International Monetary Fund's disbursement of the extended credit facility's first tranche of US$600 million, forex purchases from the mining and oil sectors, and weakened demand, Governor Ernest Addison told reporters at a press conference in Accra on Monday, 24 July 2023 following the last monetary policy committee meeting.

The Ghana cedi depreciated by 20.6 per cent against the US dollar in January 2023 and has remained generally stable since then with a cumulative depreciation of 1.8 per cent between February and June 2023, he reported.

In terms of outlook, Dr Addison said "global growth showed signs of improvement in early 2023, but near-term prospects remain uncertain amid tight financing conditions and elevated underlying inflation".

He noted that global financing conditions remain "tight" in both advanced and emerging market economies, reflecting the pass-through effects of aggressive monetary policy tightening on bank funding costs and credit conditions.

Headline inflation, he indicated, has continued on a downward trend across many countries, responding to "tighter and coordinated monetary policy, easing energy and food prices, and reduced supply bottlenecks, although core inflation has been more persistent amid cost pressures in labour markets".

Consequently, he said the policy stance for most major advanced economies is expected to remain tight until inflation declines to central bank target ranges, with adverse implications for financing conditions for emerging and frontier markets, including Ghana.

Read the MPC's full statement below: