Government lists 5 measures to arrest the cedi
The government has embarked on several measures to address the falling Cedi, with President Akufo-Addo enumerating five key points to restore the value of the local currency.
A sharp depreciation of the Ghana cedi compared to other international currencies has caused a huge jump in the prices of goods, especially imported products, causing a rise in the cost of living.
Some forex traders were exchanging one US dollar for GH₵15.00 as of Monday, October 24, but the Forex Bureau Association of Ghana reported some gains a few days later.
The marginal gains have not been reflected in the price of goods and services, with widespread fears that the cedi will fall further due to huge imports of Christmas goods as the yuletide approaches.
Some experts have also cited the yearly capital flight as a cause for concern where there is a huge demand for dollars by foreign investors repatriating profits from their businesses and investments in the country.
The situation has resulted in Ghanaians criticising the government for failing to “arrest the dollar” as the Vice President, Dr Mahamudu Bawumia, promised some time back.
However, President Nana Akufo-Addo has disclosed interventions by the government and state authorities to reverse the trend.
In an address on Sunday, October 30, he listed five responses by the government to curtail further depreciation of the cedi.
“I am confident that these immediate measures designed to change the structure of our balance of payment flows, sanitise the foreign exchange market to ensure that the banks and forex bureaus operate along international best practices, together with strengthened supervision, will go a long way to sanitize our foreign exchange market and make it more resilient against external vulnerabilities going forward,” he said.
Below are the measures:
1. Enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules. Already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector;
2. Fresh inflows of dollars are providing liquidity to the foreign exchange market and addressing the pipeline demand;
3. The Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner till the IMF Programme kicks in and the financing assurances expected from other partners also come in;
4. Government is working with the Bank of Ghana and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market; and
5. The Bank of Ghana will enhance its gold purchase programme.