Finance Minister Ken Ofori-Atta has proffered some explanation for the continuous slumping of the Ghana Cedi.
According to him the majority of the problem is caused by the increased demand for dollars to import goods for the holiday season.
Speaking to the media about Ghana’s currency at the time, Mr. Ken Ofori-Atta acknowledged that he was surprised by how much the cedi had fallen in value in comparison to other major trading currencies, particularly the US dollar.
“It’s quite perplexing to see where it’s going. Of course, typically in October, people are importing for Christmas and maybe there’s a rush for that [the dollar],” he mentioned.
However, he urged the public to avoid becoming overly alarmed by the current state of the economy because their panic response could further aggravate the cedi’s depreciation rate.
“We really would want people to know not to panic or be rushing in order to put pressure on the currency,” the finance minister added.
According to him, the country, despite the economic challenges it is facing, is “in good shape.” At the beginning of October 2022, a dollar was trading for about GH₵11.
Three weeks later, and a dollar is trading at almost GH₵15 on the forex market as of October 21, 2022.
Many groups and individuals have expressed worry over the rate at which the local currency is losing its value.
The Ghana Union of Traders Association recently closed their shops to register their displeasure against the cedi’s depreciation and high taxes.
Economist, Professor Lord Mensah has said there is a cause to worry as Ghana continues to import heavily as against exporting.
“Once everything on the shelf is imported with the dollar, the Minister cannot say we cannot worry about the dollar. We need to get worried about the dollar because we know that getting to Christmas, the demand for the dollar is high, adding to the depreciation of the dollar, and the rate for this year alone is unbearable,” Professor Mensah told the media.
However, Mr Ofori-Atta wants Ghanaians to remain calm as the government puts in the right measures to regain the value of the cedi.
The Finance Minister explained that the cedi would begin to appreciate “once we conclude with the International Monetary Fund (IMF), which will lead to the fund’s disbursement early next year.”
“The support we are getting from countries like Germany and France, we are confident that we will get the resources needed,” he added.
The government of Ghana is hoping to receive as much as $3 billion under an IMF extended credit facility program to bolster its finances and regain access to global capital markets.
The Ministry of Finance has disclosed that Ghana and the IMF have reached a clear path towards the final details of a programme, with the goal of reaching a Staff-Level Agreement by the end of the year.
Source: The Independent Ghana|