While introducing measures to address the Cedi’s decline against the major trade currencies, especially the Dollar, the Bank of Ghana (BoG) has issued a calm call.
The local currency’s problems have five major causes, according to the central bank.
The US dollar’s strength, investor response to a credit rating downgrade, non-rollover of maturing bonds, the steep increase in crude oil prices and their effect on the oil bill, and the loss of external financing are these.
“Gold Purchase Program to increase foreign exchange reserves; Special Foreign Exchange Auction for the Bulk Distribution Companies (BDCs) to help with the importation of petroleum products; Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as it becomes available,” are the measures put in place to address these, according to the BoG.
In order to help fulfill the demand for external payments, the Bank of Ghana is providing the banking industry with liquidity in foreign currencies. Once paid out, the recently approved USD 750,000,000 Afriexim credit facility by Parliament will improve the nation’s foreign exchange situation and support trust building.
“The Cocoa Loan is anticipated in the year’s last quarter. Additionally, this facility will contribute to the provision of more foreign cash to combat the cedi’s depreciation. When the IMF program is finished, we anticipate that it will significantly contribute to regaining investor confidence in the economy and stimulating portfolio flows.
According to a statement made by the Central Bank, these actions will significantly boost the Central Bank’s foreign exchange reserve position.