Professor Godfred Bokpin, an economist and finance expert, has attributed part of the Cedi’s depreciation to the International Monetary Fund’s (IMF) programme with Ghana.
He said that under the IMF programme, the Central Bank was barred from intervening in the currency exchange market when the Cedi fell against major trading currencies.
That situation prevented the Bank of Ghana (BoG) from entering the foreign currency market to stabilise the Cedi.
Prof. Bokpin made the comment on a local radio station that was monitored by the Ghana News Agency (GNA) over the weekend.
“Part of the reason why the cedi is depreciating is also consistent with the latest IMF-supported program. Under the IMF-supported programme, they favour a stable exchange rate.
“This limits the ability of the central bank to be in the market and fight off the depreciation through our reserves.
“Part of the IMF programme is to build our reserve of three months of import cover for 2026…What that means is that it ties the hands of the central bank to intervene in the market to sell dollars to stabilise the cedi.
“Now they cannot do that under an IMF programme,” he said.
In May 2023, the IMF Executive Board approved a US$3 billion External Credit Facility (ECF) with Ghana for 36 months.
Prof. Bokpin also identified other factors that have influenced the cedi’s recent depreciation.
He said that the cedi’s depreciation was also triggered by the delayed foreign debt restructuring, which affected the receipt of the third tranche of the ECF under the IMF programme.
The IMF has indicated that it would transfer the third tranche of $360 million, notwithstanding Ghana’s inability to negotiate a final debt agreement with its official bilateral creditors.
Mr. Charles Kusi Appiah Kubi, a representative of the Ghana Union of Traders Association (GUTA) and a panellist on the discussion, suggested the prioritisation of retention policies to stabilise the cedi since multinational companies would be barred from repatriating profits.
Dr. Kwabena Nyarko Otoo, Director of Research for the Trade Union Congress, also encouraged the Central Bank to address the “open” trade of foreign exchange in Ghana, particularly the black market, to relieve pressure on the cedi.
Latest Stories
-
Bankers League Gala kicks off at Legon Stadium with thrilling group stage action
5 minutes -
Slay Queen Economy — Data Over Degrees
13 minutes -
Asantehene calls on African leaders to foster self-reliance through cooperation and intra-trade
24 minutes -
Media urged to champion increased investment in Africa’s agriculture
44 minutes -
‘Africa needs its own rating system’ – Akufo-Addo on global credit bias
53 minutes -
Think tanks condemn PURC’s 2.45% tariff hike, demand transparency
55 minutes -
Fire incidents: Interior Minister condemns prank calls, urges public education
59 minutes -
Franklin Cudjoe criticises Torkornoo’s press briefing as needless
1 hour -
Afreximbank was Ghana’s lifeline when the world turned away during COVID-19 – Akufo-Addo
1 hour -
Akufo-Addo pushes for 30% sovereign reserves in African banks
1 hour -
Government insures fire service personnel
1 hour -
Afreximbank launches PAPSS credit card to boost financial integration
1 hour -
Government to design innovative financing scheme for agribusiness – Deputy Trade Minister
1 hour -
Obasanjo outlines three-pillar strategy for Africa’s sustainable development
2 hours -
Government to support 200 MSMEs with digital infrastructure
2 hours