For nine months this year, the cedi has lost 40.05% in value to the US dollar, according to data from Bloomberg. This makes the cedi the second-worst performing currency in the world.
The cedi is ranked as the worst among the 30 top-performing currencies on the African continent.
In July, August and September the cedi lost almost 21% in value to the US dollar, pounds sterling and Euro.
The cedi’s woes come on the back of high debts and low investor confidence which has made it impossible for Ghana to access the international capital market for borrowing.
To this end, Ghana is seeking some $3 billion from the IMF to support its economic programmes.
The government says the IMF support is to help the country recover from challenges caused by external factors such as the covid pandemic and the Russia-Ukraine war.
Bank of Ghana interventions to stabilise the cedi:
1. Once disbursed, the recently approved US$750,000,000 Afriexim loan facility by Parliament, is expected to boost Ghana’s forex position.
2. 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.
3. Gold Purchase Programme to increase foreign exchange reserves.
4. Special Foreign Exchange Auction for the Bulk Distribution Companies (BDCs) to help with the importation of petroleum products.
5. 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.
6. The Bank of Ghana is supporting the banking sector with foreign currency liquidity to help meet the demand for external payments.
7. The IMF programme once finalised, will also go a long way to help restore confidence in the economy and drive portfolio flows. These measures will go a long way to increase the foreign exchange reserve position of the Central Bank.