Member of Parliament for Walewale, Abdul Kabiru Mahama, has attributed the sharp appreciation of the Ghanaian cedi to strategic interventions by the Bank of Ghana (BoG), particularly the use of hard currency from the country’s reserves.
Speaking during a panel discussion on Channel One TV’s The Big Issue on Saturday, May 17, he explained that the BoG’s injection of “hard currency” into the market had played a significant role in the appreciation of the Cedi
“The Bank of Ghana in April injected almost about $500 million by way of auction. So basically, it is the central bank using the reserves of hard currency that they have to support the local currency. When you have the availability of the currency within the system, people can then decide that there is no point trying to hoard dollars or scramble for the dollar. It is there when we need it, so it brings calm into the market,” he said.
According to him, this intervention will calm market anxieties and ease speculative pressure on the cedi, encouraging traders and businesses to hold onto the local currency rather than converting to dollars.
While kabiru pointed directly to the BoG’s auction strategy as the main driver of the currency’s recovery, other experts have pointed to additional factors.
Prof. Eric F. Oteng-Abayie, an economist and economic policy analyst at the Kwame Nkrumah University of Science and Technology (KNUST), offered a broader view.
He attributed the cedi’s resurgence to a combination of domestic policy reforms and favourable global economic conditions.
The cedi, which had seen sharp depreciation in the first quarter of the year, has in recent weeks shown signs of strengthening against major foreign currencies, particularly the U.S. dollar, with 12.4 cedis to a dollar.
—citinewsroom
