The Bank of Ghana (BoG) is taking proactive steps to stabilize the cedi by building up its reserves, particularly as the festive season approaches and the demand for foreign exchange surges.
Currently, the cedi is trading at a rate of nearly GHS 17 to a dollar on the foreign market, reflecting a significant year-to-date depreciation of 24.3%.
The Bank of Ghana’s strategy is to focus on bolstering confidence and assurance among businesses and consumers by piloting the local currency toward greater stability amidst the current economic pressures.
According to the Governor of the Bank of Ghana, Dr. Ernest Addison, boosting reserves is vital to minimizing fluctuations in the cedi’s value and safeguarding economic stability.
“Some are praying that the cedi will recover to GHS 10.00 to a dollar. These are the problems in our economy, the issues about the exchange rate, and financial sector issues. But I think the good news is that we are making progress because the developments we are seeing are not different from other jurisdictions.
“So, we need to stay focused and implement the appropriate policies and build buffers to be able to support the progress we have made.” He explained.
He further noted that this approach will bolster the local currency as well as reinforce investor trust and ultimately promote economic stability.
“We have $7 billion in foreign exchange reserves. If I want to drive the dollar-cedi rate at GHS 10, I can do that tomorrow. But what about the day after tomorrow? So, we are balancing various factors, trying to build reserves, and managing the exchange rate. So, all is not lost yet, there is some silver lining in the cloud, hopefully, we will see the appreciation of the currency”, Dr. Addison stated.
Governor Addison was speaking at the launch of “The Concise Law of Banking”, authored by Afua Appiah-Adu, a private legal practitioner. The book is a practical guide to banking law, commissioned by the Institute for Law & Development (ILAD).
The book covers a wide range of topics that are fundamental to banking law. They include: Introduction to Banking Law; Bank Regulation, Supervision and Licensing; The Banker-customer Relationship; Bank Accounts; Cheques; Recovery of Money Paid Mistakenly; Paying Bank & Collecting Bank; Electronic Payment Systems; Payment Cards; Offshore Banking; Credit Reporting; Borrowing and Lending in Banking; Documentary Credits and Money Laundering.
