Why Cedi Is Depreciating – Finance Minister Ofori Atta Explains

The Minister of Finance, Ken Ofori-Atta, has urged Ghanaians to not panic or put further pressure on the cedi as the currency continued its rapid slide against the US dollar in October.

Thursday’s depreciation (as much as 9.5 per cent against the US dollar), the biggest in 22 years, took losses suffered by the Ghana cedi to nearly 52% this year, the worst performance among 148 currencies tracked by Bloomberg.

According to Mr. Ofori-Atta, it is quite perplexing to see the level of the cedi’s depreciation. He said the current level of depreciation may have been occasioned by a rush for dollars to import Christmas goods. 

Mr Ofori-Atta was hopeful that the slide would be halted when the government reaches an agreement with the International Monetary Fund (IMF) for economic support this year.

“…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) but my expectation is that once we also conclude with the Fund (IMF), that will lead to the fund’s disbursement early next year to do that,” Mr. Ofori-Atta said in an interview with Asaase Radio.

“The support we are getting from countries like Germany and France, we are confident that we will get the resources needed, so we really would want people to know not to panic or be rushing in order to put pressure on the currency, I think it’s unnecessary and we are in good shape”.

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.

He added that additional support from countries such as Germany and France would provide the country with the funds needed to halt the slide of the cedi.

Source: adomonline.com