The Governor of the Bank of Ghana (BoG) Dr Ernest Addison has warned against speculative comments about the local currency.
He says the speculative comments have largely contributed to the woes of the Cedi.
Addressing the 118th Monetary Policy Committee (MPC) press conference in Accra on Monday, May 27, he said “Stop engaging in speculative purchasing and the comments.”
Dr Addison further explained the other factors causing the woes of the Cedi.
He said “The pressure reflected an increased in demand for higher imports, IPP arrears payment or the energy sector payment and uncertainty around debt restructuring with external constraints ”
He however assured that there would be corrections.
“There will be corrections,” he said.
UGBS Professor highlights source of Cedi’s rapid depreciation
Recently, the Minister of Finance Dr Mohammed Amin Adam also observed that speculations on the Ghanaian market are affecting the Cedi.
He urged that the speculations should be reduced.
Speaking during his monthly press briefing in Accra on Friday, May 24, he said “There is so much speculation out there on the Cedi, so we need people to know that these speculations do not help us as a country or our Cedi.”
Dr Amin Adam further assured that the Cedi stability is expected to gain more in the medium term after the completion of the domestic debt exchange programme.
He also stated that the local currency is expected to gain as the managers of the economy make more progress on fiscal consolidation and improve on the reserves over the medium-term.
“But for recent pressures, we are seeing on exchange rate movements, the exchange rate has been largely stabilised with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of Nov 2022 to 27.8% at the end of Dec 2023.
“The Cedi’s stability has continued into 2024, with a cumulative depreciation of 14.2% as of 20th May 2024, compared to 20.7% recorded in the same period in 2023. We expect the cedi’s stability to improve into the medium-term as we complete debt restructuring, make more progress on fiscal consolidation, and improve our reserves over the medium-term.”
“The recent pressures we are observing on the cedi is largely on the back of the strengthening of the US Dollar against major trading currencies, seasonal forex demand including elevated demand from corporate institutions, payment to contractors and to IPPs, high Cedi liquidity and speculation.”
