Cedi Depreciation blamed on Day-to-Day Economic Pressures
The Governor of the Bank of Ghana, Dr. Ernest Addison, has attributed the recent depreciation of the local currency, the cedi, to day-to-day pressures on the economy. He explained that when there is additional demand for the cedi, the currency will be restricted and that the Central Bank cannot fix the exchange rate.
Dr. Addison appeared at the Public Accounts Committee (PAC) of Parliament on Monday, where he discussed the cedi’s depreciation. He said that payments to contractors can move the exchange rate because some of them immediately convert into foreign exchange.
The Governor also addressed the Gold for Oil policy introduced by the government, stating that it is intended to help avoid the pressure on the exchange rate from private Oil Marketing firms. Ghana recently took delivery of the first consignment of the Gold for Oil deal reached with the United Arab Emirates, with some members of the PAC expressing concerns about the policy’s sustainability.
Dr. Addison urged the committee to be hopeful, stating that “it is early days yet to conclude.” The 40,000 metric tons of oil arrived at the Tema port on Sunday, January 15, 2023, according to the Ministry of Lands and Natural Resources. The Energy Ministry, the Bulk Oil Storage, Transportation, and Oil Marketing Companies are to formulate plans for its distribution and sale.
The PAC is currently examining the Auditor General’s report on public accounts for the year 2020 and will consider the accounts of public boards, corporations, and other statutory institutions for the year 2020. The proceedings are expected to be concluded on January 27, 2023.
