Ghana's Finance Minister, Dr. Mohammed Amin Adam, has urged the public to avoid panic-buying foreign exchange amidst recent volatility in the Cedi's value.
Speaking at the Ministry of Finance’s Monthly Economic Update on Friday, Dr. Amin Adam attributed the current exchange rate pressures to a strengthening US Dollar, seasonal forex demand, and other temporary factors.
He emphasized that the government is enacting robust measures to stabilize the currency.
“There is no need to rush and buy forex,” Dr. Amin Adam stated, noting that Ghana anticipates significant inflows of foreign exchange by the end of the year, which will bolster the Cedi's stability.
He detailed that a minimum of $2.32 billion is expected from various sources, including disbursements from the International Monetary Fund (IMF) and World Bank, the Gold-for-Oil Programme, the Bank of Ghana’s (BoG) Gold for Reserves programme, and proceeds from the Cocoa Syndicated Funds.
“We expect total disbursements of at least $2.32 billion before the end of the year to add to the significant foreign exchange reserves already built up by the BoG,” he affirmed.
Despite acknowledging the recent pressures on the Cedi, Dr. Amin Adam expressed optimism about medium-term stability.
He highlighted that the Cedi's cumulative depreciation stood at 14.2% as of May 20, 2024, an improvement from the 20.7% depreciation recorded in the same period in 2023.
The Minister projected that the Cedi would remain largely stable and potentially improve as the government completes its debt restructuring, advances fiscal consolidation, and enhances the country's foreign reserves.
Additionally, Dr. Amin Adam reviewed the progress made under the IMF-Supported Post-COVID-19 Programme for Economic Growth (PC-PEG).
Following a successful second review by the IMF in April 2024, Ghana secured a Staff Level Agreement (SLA), positioning the country for the IMF Executive Board's approval of a third tranche disbursement of $360 million in June.
This would bring total disbursements under the program to $1.56 billion.
“The positive results of the first and second reviews of the implementation of the IMF-supported Programme testify that we are achieving the Programme’s objective of restoring macroeconomic stability and debt sustainability,” he remarked.
Dr. Amin Adam also highlighted the resilience of Ghana’s economy, noting a 2.9% GDP growth in 2023, which exceeded the original projection of 1.5% and the revised projection of 2.3%.
To address the perennial depreciation of the Cedi, the Ministry of Finance is collaborating closely with the BoG on several initiatives.
These include fast-tracking fiscal consolidation, intensifying the Gold-for-Oil and Gold for Reserves programmes, and implementing strategic forex interventions.
The Finance Minister’s reassurances aim to calm the markets and the public, promoting confidence in the government's economic management strategies amidst ongoing challenges.
Story by: Joshua Kwabena Smith
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