The Bank of Ghana (BoG) has announced that it is implementing proactive measures to strengthen its foreign reserves in response to the cedi’s ongoing depreciation against major currencies.
As this festive season approaches, the central cank is preparing for an anticipated increase in foreign exchange demand. Currently, the cedi is trading at nearly GH¢17 to one U.S. dollar, reflecting a considerable year-to-date depreciation of 24.3 percent.
Speaking at the launch of ‘The Concise Law of Banking’, authored by Afua Appiah-Adu – a private legal practitioner, Bank of Ghana Governor Dr. Ernest Addison emphasised the importance of building reserves to mitigate fluctuations in the cedi’s value.
These measures are essential for ensuring economic stability and maintaining confidence in the financial system.
Late October 2024, Finance Minister Dr. Mohammed Amin Adam also expressed optimism about the cedi’s resilience amid rising forex demand, particularly with the holiday season on the horizon.
During the recent IMF meetings, Dr. Adam noted the cedi’s relative stability over the period, asserting that government is determined to continue stabilising the currency.
Dr. Adam affirmed that the Bank has built up “significant reserves to meet the demand” and anticipates additional inflows from international financial institutions in the coming months.
According to the Bank of Ghana, Gross International Reserves rose by US$1.58billion to US$7.50billion at the end of August 2024, providing approximately 3.4 months of import cover.
Net International Reserves also increased, by US$1.73billion – reaching US$4.92 billion at the same time. The growth in Gross International Reserves was primarily attributed to strong performance of the domestic gold purchase programme.
Additionally, the country is expected to receive US$360million from the International Monetary Fund (IMF) following the board’s approval on December 2.
These funds are anticipated to bolster the nation’s foreign currency reserves and contribute to maintaining exchange rate stability into early next year.
The central bank revealed that liquidity risk remains well-contained in the banking industry, provided Government of Ghana (GoG) bonds are liquid.
It also notes that exchange rate fluctuations have minimal impact on solvency conditions in the banking sector.
The post Editorial: Proactive measures to strengthen cedi in place appeared first on The Business & Financial Times.
Read Full Story
Facebook
Twitter
Pinterest
Instagram
Google+
YouTube
LinkedIn
RSS