Bank of Ghana vows to stabilize cedi amid rapid depreciation

Ghanaian

The Bank of Ghana (BoG) has reaffirmed its dedication to stabilizing the cedi’s exchange rate amid its rapid depreciation against the dollar.

In a Monetary Policy Committee press release on Monday, May 27, the BoG emphasized its substantial foreign exchange reserves to support the market.

The BoG urged economic agents to avoid speculative purchases, warning that such actions could

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“The Bank of Ghana remains fully committed to providing stability in the exchange rate for the cedi. The Bank has enough foreign exchange reserves to support the market and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs,” the BoG stated.

The central bank acknowledged recent pressures on the exchange rate, especially in the forex bureaux market, attributing this to increased demand for imports, energy sector payments, and uncertainties surrounding debt restructuring negotiations with external creditors.

“The pressure in the foreign exchange market reflected increased demand for higher imports, energy sector payments, and uncertainty surrounding the progress of debt restructuring negotiations with external creditors,” the BoG added.

As of May 22, 2024, the Ghanaian cedi had depreciated by 14.6% against the US dollar year-to-date, compared to a 21.8% depreciation for the same period in 2023. The BoG indicated that these conditions have influenced market sentiments and led to additional pressures on the cedi.