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We’re fully committed to stabilising exchange rate – BoG

The Bank of Ghana (BoG) has affirmed its commitment to stabilise the cedi’s exchange rate, amidst the rapid depreciation against the dollar.

In its Monetary Policy Committee Press Release on Monday, May 27, the BoG announced that it possesses sufficient foreign exchange reserves to support the market.

It advised economic agents to refrain from speculative purchases, warning that they would incur economic losses when the market corrected itself.

“The Bank of Ghana remains fully committed to providing stability in the exchange rate for the cedi. The Bank has enough foreign exchange reserves to support the market and economic agents should stop engaging in speculative purchases as they will suffer economic losses when the correction occurs,” the BoG stated.

The BoG noted that the exchange rate has recently experienced some pressure, particularly in the forex bureaux market.

“The pressure in the foreign exchange market reflected increased demand for higher imports, energy sector payments, and uncertainty surrounding the progress of debt restructuring negotiations with external creditors,” it added.

The BoG indicated that these conditions have influenced sentiments and led to additional pressures.

“On a year-to-date basis, the Ghana cedi depreciated by 14.6 per cent against the US dollar as of 22nd May 2024 compared to 21.8 percent depreciation for the first five months of 2023,” it added.

Meanwhile, the Ghana Federation of Traders has urged the government to implement measures to decrease the exchange rate from GH¢15 to GH¢10, threatening repercussions if this is not done.

The federation, composed of eight groups, argues that the cedi’s depreciation is eroding their capital, thereby putting their businesses at risk.

At present, a dollar is trading at GHS 14.60 on the forex market, a significant increase from the GHS 10.97 rate in May 2023.

Eric Kwaku Boateng, the Chairman of the Ghana Federation of Traders and President of the Automobile Dealers Union, insisted that decisive measures are needed to lower the exchange rate.

He cautioned that the group will stage a nationwide demonstration if the government does not address the issue promptly within two weeks.

Source: Abigail Arthur

27th May, 2024

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