World Bank cautions BoG on excessive FX Interventions, calls for banking sector reforms

The World Bank has urged the Bank of Ghana (BoG) to avoid excessive foreign exchange (FX) interventions, warning that such actions could disrupt market balance and weaken economic resilience.

This was contained in the latest Ghana Economic Update report, launched in Accra today, August 14, 2025 which emphasised the need for the central bank to allow market forces have greater influence over exchange rate movements.

The report also called for the swift completion of the recapitalisation of all financial institutions in line with the Financial Sector Strengthening Strategy. In addition, it recommended a comprehensive asset quality review to address high non-performing loans (NPLs), providing banks with clear action plans to restore financial stability.

“These measures will help strengthen balance sheets, rebuild confidence, and position the banking sector to better support Ghana’s economic recovery,” the World Bank stated.

The recommendations come as Ghana presses ahead with reforms under its IMF-supported programme aimed at restoring macroeconomic stability and fostering sustainable growth

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