Rating agency, FITCH says the massive interest rate hike and new foreign exchange controls by the Bank of Ghana alone may prove inadequate to stop free fall in the Ghana cedis' value.

The Bank of Ghana last week increased the policy rate by 200 basis points to 18 percent and introduced a series of measures to stabilize the local currency. These include restrictions on foreign currency-denominated loans, repatriation of export proceeds, margin accounts for import bills, and revised operating procedures for foreign-exchange bureaus and halting the use of dollars for local transactions.

But FITCH says all these measures must be complemented with programs to address the rising public debt and government's expenditure.

According to the rating agency, these additional measures would address  growing domestic macroeconomic imbalances, which has contributed largely to the  cedis' depreciation .

FITCH’s comments on the latest measures should mean that the agency is still not satisfied with measures been taken to tackle the huge budget deficit,  which could have influenced their decision on a possible  review of the country's credit worthiness, which they  downgraded  last year  from B+ to B. 

The rating agency insisted that government has larger role to play in helping stabilize the local currency. 

But speaking to Joy Business from London, director for sovereign  group, Carmen Altenkirch says  tackling  the budget deficit might  be the way out to correct the situation for now.