The Minister of Finance, Dr. Mohammed Amin-Adam has urged Ghanaians not to rush to exchange Cedis for Dollars as the local currency is generally stable. He also warned against speculation which is not helping the cedi’s stability but noted that, the Ministry of Finance is working with the Bank of Ghana (BOG) to address the free fall of the cedi by fast tracking fiscal consolidation efforts, intensifying the gold for oil programme as well as intensify the ongoing gold for reserve programme of the BOG.
Dr. Amin-Adam however assured the public that there is enough forex in the market as the government expects to build up reserves with the coming onstream of the third tranche of disbursements from the International Monetary Fund (IMF) after the IMF Executive Board approval of the staff level agreement with the government next month which will unlock $360 million bringing the total disbursement to $1.56 billion. Again, the $150 million facility from the World Bank’s International Development Association which was approved by Parliament last Friday is expected to add to Ghana’s gross international reserves.
“Gross international reserves is also improving and now stands at $6.2 billion covering 2.7 months of import cover at the end of February 2024 compared to $5.9 billion in the corresponding period of 2022. Gross international reserves expected to improve to cover at least 4.4 months of import cover in the medium-term to be supported by external inflows from the IMF, the World Bank and other development partners,” he said
He observed that the Cedi has depreciated cumulatively by 14.2% year-to-date compared to 20.7% same time last year. The pressure on the Cedi is linked largely as a result of the strength of the US Dollar against major trading currencies including the Ghanaian Cedi, seasonal forex demand and payment to Independent Power Producers amounting to $400 million. Also, government has made payments to contractors totaling GH¢49 billion year-to-date compared to GH¢41 billion paid to contractors same time last year, as some of the contractors exchange their cedis for dollars.
“We expect the stability to improve into the medium-term as we complete debt restructuring; as we make progress on fiscal consolidation, and as we improve on our reserves over the medium-term.”