Information Minister Kojo Oppong Nkrumah has said a lot of dollars is coming in to shore up the strength of the local currency, the Cedi.
The Ofoase Ayirebi Lawmaker said the US$750 million Afreximbank loan and then from the cocoa US$1.3 billion syndicated loan that comes together like US$2 billion will be hitting the Ghanaian economy soon.
“External factors such as the repatriation of funds have led to a cedi that has depreciated very quickly, the Bank of Ghana introduced a raft of measures to deal with the depreciation of the cedi,” he said.
“I think this morning, the President was briefed that the US$750 million that we were expecting, now all the paperwork has been completed and should hit our account by Tuesday or Wednesday.
“So, if I were you and I was holding onto dollars, I will be selling by now because there is a lot of dollar coming in from the US$750 million and then from the cocoa US$1.3 billion syndicated loan that comes together like US$2 billion hitting the Ghanaian economy.
“We need to cut down on our import bills significantly. We are importing rice, chicken, fruit juices, there need to be clarity on what we need to do to reduce the importation, and those are some of the things that are being done,” he told Accra-based Asaase Radio on Tuesday.
Regarding the Cedi’s performance, the Bank of Ghana (BoG) in a statement called for calm as it has introduced measures to resolve the fall.
The BoG identified five key reasons for the woes of the local currency.
These are “The strength of the US dollar, Investor reaction to Credit Rating Downgrade, Non-Roll over of Maturing Bonds, The sharp rise in crude oil prices and impact on the Oil Bill, Loss of External Financing.”
The measures introduced to resolve these, according to the BoG, are the “Gold Purchase Program to increase foreign exchange reserves; Special Foreign Exchange Auction for the Bulk Distribution Company’s (BDCs) to help with the importation of petroleum products; Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as when it becomes available.
“The Bank of Ghana is supporting the banking sector with foreign currency liquidity to help meet the demand for external payments. The recently approved USD750,000,000 Afriexim loan facility by Parliament, once disbursed, will boost the foreign exchange position of the country and help restore confidence.
“The Cocoa Loan is expected in the last quarter of the year. This facility will also help provide more foreign currency to help address the cedi depreciation. In the short term, we expect that when the IMF programme is finalized, it will also go a long way to help restore confidence in the economy and drive portfolio flows.”
By Laud Nartey