BoG Governor expresses confidence in stability of cedi amid recent fluctuations
The governor of the Bank of Ghana, Dr. Ernest Addison, has expressed confidence that the country’s currency, the cedi, will remain stable despite recent fluctuations.
The cedi has been on a steady rise against the US dollar in recent weeks, leading to fears that the country is heading back to the economic turmoil of 2022, when the cedi depreciated rapidly.
However, Dr. Addison believes that the worst days for the cedi are over, and that the poor performance of the currency in 2022 will not be repeated if the country’s debt exchange program is successful.
He explained that the debt standstill, which means that the money used to service foreign debt will not be going out anymore, will give the country more room and take pressure off the foreign exchange market.
Despite this, Dr. Addison did admit that the country does not have enough foreign reserves, with import cover currently lasting only a month and a half.
This, he said, is due to various factors, including payments to contractors, which can immediately move the exchange rate and convert that into the foreign exchange, as well as payments for energy, which also impact the foreign exchange market.
In addition to this, the Director of Financial Market at the Bank of Ghana, Stephen Opata, has stated that the Central Bank is confident it will be able to sustain the Gold for Oil deal, which aims to reduce pressure on the foreign market.
Opata explained that there is no cause for concern as the bank is well-positioned to meet the demand for 160,000 ounces of gold per month under the deal.
He added that the numbers currently being looked at represent around 50 to 60% of the country’s consumption.
The first consignment of oil under the policy arrived at the Tema Port on Monday, further reducing pressure on the foreign market.
The governor of the Bank of Ghana said that if this government-to-government arrangement works well, it will not add further pressures to the exchange market.
