BoG happy with relative stability of the Cedi against dollar

The First Deputy Governor of the Bank of Ghana, Dr. Maxwell Opoku-Afari has argued that the Bank of Ghana and the Finance Ministry should be commended for the relative stability of the Ghana’s Cedi in the last 3 and half years.

According to him, reforms in fiscal and monetary measures by these two institutions are commendable.

Over the period, the performance of the Ghana cedi against the US dollar has been topical amongst economists, as well as political actors.

Out of some 15 key currencies on the continent, the cedi remained relatively stable, going down by only negative 2.86 percent from January 2020 till now.

“We entered 2020 with a very solid foundation in terms of Gross International Reserve accumulation. We ended 2019 with about $8.4 billion in terms of gross reserves which was about 4 months of import cover and that is the highest we have ever had which shows that we have enough cushion to be able to stand any external vulnerabilities.

If you look at previous years, most of the time the currency moves a lot in the first five months of the year, but this time we entered the year with this solid level of gross international reserves,” he said.

Speaking to Philip Nanfuri, on Accra based MX24 TV, the deputy governor said one reform is the introduction of the Forward Auction Market in the last two months of 2019, but began full operational impact in the first quarter of 2020.

This, according to him, allows people to buy foreign exchange ahead of time which reduces market sentiments.

Commenting on other factors that have contributed to the stability of the cedi, he noted the $3 billion Eurobond from the capital market and the $1 billion advanced to the country by the International Monetary Fund (IMF).

“On top of that, through proper timing and a wind of chance, we happen to go to the Eurobond market just before the pandemic hit and got $3 billion to add to the gross international reserves that have built up.

“In addition, when the pandemic hit, Ghana accessed $ 1 billion from the International Monetary Fund as part of the Rapid Credit Facility (RCF) to address the COVID.

“So when you put all these together, it positions the Central Bank to be able to have enough reserves to be able to support the currency going forward.

“That is why in the first 4 months of the year, we saw an appreciation of the currency whereas in other similar months in comparable years back, we saw significant depreciation,” he added.

The post BoG happy with relative stability of the Cedi against dollar appeared first on The Chronicle Online.

Read Full Story