The Bank of Ghana (BoG) is bolstering its foreign exchange reserves to stabilize the cedi, which has been under pressure as demand for dollars and other major foreign currencies rise in anticipation of the holiday season. With the cedi currently trading at nearly GHS 17 to the dollar—representing a 24.3% depreciation since the start of the year—the central bank’s actions are aimed at easing anxieties among businesses and consumers while working to preserve the value of Ghana’s currency.
Bank of Ghana Governor, Dr. Ernest Addison, emphasized that reinforcing reserves is vital to manage currency fluctuations and maintain economic stability. Addressing stakeholders, Dr. Addison acknowledged the challenges facing the economy, such as exchange rate volatility and issues in the financial sector, but expressed confidence in the measures being implemented.
“There is hope for the cedi. Some expect it to recover to GHS 10 to the dollar, but we need to be realistic about the economic context we’re operating in,” Dr. Addison said. “What we’re seeing is consistent with trends in other countries. Our focus remains on strengthening our buffers and implementing policies that will stabilize the currency in the long term.”
Dr. Addison noted that the central bank currently holds $7 billion in foreign exchange reserves, which he said could theoretically be used to bring down the dollar-cedi exchange rate quickly. However, he stressed that a balanced, gradual approach is more sustainable, adding, “We are focusing on building up our reserves while managing the exchange rate to ensure a stable economic outlook. There is a silver lining, and hopefully, the cedi will appreciate in due course.”
The Governor’s comments came during the launch of The Concise Law of Banking, a book authored by legal practitioner Afua Appiah-Adu, which aims to provide a clear guide on banking law for professionals and students. Published by the Institute for Law & Development (ILAD), the book addresses key aspects of banking, including regulation, electronic payments, credit reporting, and anti-money laundering. Dr. Addison lauded the work as a timely resource that will deepen understanding of Ghana’s banking laws and practices.
With rising foreign currency needs, the central bank’s strategy to build reserves and cautiously manage the exchange rate underscores a commitment to fostering stability for both businesses and households, particularly as the festive season approaches.
Source:TheDotNews