Ghana Cedi Shows Stability Against Dollar As Bank Of Ghana Interventions Pay Off

The Ghana Cedi has shown signs of stability against the US Dollar and other major foreign currencies in recent weeks following sustained interventions by the Bank of Ghana and improved foreign exchange inflows.

The local currency which had faced depreciation pressures earlier this year has appreciated slightly against the dollar, bringing some relief to businesses, importers and consumers across the country.

According to Graphic Online which reported on October 28, the Ghana Cedi has shown signs of stability against the US Dollar and other major foreign currencies in recent weeks following sustained interventions by the Bank of Ghana.

The Bank of Ghana said the stability is due to improved gold and cocoa export receipts, increased remittances and prudent monetary policy measures implemented to control inflation and stabilize the foreign exchange market.

According to CitiNewsroom which reported on October 28, the Governor of the Bank of Ghana, Dr Johnson Asiama, said the central bank will continue to implement policies to maintain exchange rate stability and to build adequate foreign reserves to cushion the economy against external shocks.

Dr Asiama noted that the Gold for Reserves programme and other initiatives have helped to increase Ghana’s foreign exchange reserves and to reduce pressure on the cedi from high demand for foreign currencies.

According to GBC Ghana Online which reported on October 28, financial analysts have attributed the cedi’s stability to increased investor confidence following successful debt restructuring and improved macroeconomic indicators that have boosted confidence in Ghana’s economy.

They explained that reduced government borrowing and fiscal discipline have also contributed to the stability, as well as improved foreign direct investment inflows into sectors such as mining, oil and gas and manufacturing.

According to GhanaWeb which reported on October 28, traders at the Forex Bureaus in Accra have confirmed that the cedi has remained relatively stable in recent weeks, with the dollar trading between GH¢15.80 and GH¢16.20 compared to previous highs of over GH¢17.00.

The traders said the stability has helped businesses to plan effectively and has reduced the cost of imports, which is expected to have positive effects on prices of goods and services in the coming months if sustained.

The Bank of Ghana has assured the public that it will continue to monitor developments in the foreign exchange market and take appropriate measures to ensure stability and to prevent excessive volatility that could affect economic growth.

Economists have urged government to sustain fiscal discipline, boost exports and promote local production to ensure long term stability of the cedi and to reduce Ghana’s dependence on imports that put pressure on the local currency.

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