For nine months this year, the cedi has lost 40.05% in value to the US dollar, according to data from Bloomberg.
This makes the cedi the second-worst performing
currency in the world.
The cedi is ranked as the worst among the 30
top-performing currencies on the African continent.
In July, August and September the cedi lost almost
21% in value to the US dollar, pounds sterling and Euro.
The cedi’s woes come on the back of high debts and
low investor confidence which has made it impossible for Ghana to access the
international capital market for borrowing.
To this end, Ghana is seeking some $3 billion from
the IMF to support its economic programmes.
The government says the IMF support is to help the
country recover from challenges caused by external factors such as the covid
pandemic and the Russia-Ukraine war.
Bank of Ghana
interventions to stabilise the cedi:
1. Once disbursed, the recently approved
USD750,000,000 Afriexim loan facility by Parliament, is expected to boost
Ghana’s forex position.
2. The Cocoa Loan is expected in the last quarter
of the year. This facility will also help provide more foreign currency to help
address the cedi depreciation.
3. Gold Purchase Programme to increase foreign
exchange reserves.
4. Special Foreign Exchange Auction for the Bulk
Distribution Companies (BDCs) to help with the importation of petroleum
products.
5. Bank of Ghana is entering into a cooperation
agreement with the mining companies to provide BOG with the opportunity to buy
gold as when it becomes available.
6. The Bank of Ghana is supporting the banking
sector with foreign currency liquidity to help meet the demand for external
payments.
7. The IMF programme once finalised, will also go
a long way to help restore confidence in the economy and drive portfolio flows.
These measures will go a long way to increase the foreign exchange reserve
position of the Central Bank.
Source:Peacefmonline