Finance Minister Seth Terpker has said the first tranche of the IMF bailout fund will supplement other sources of foreign exchange for the Bank of Ghana.
He said he is convinced that the money will shore up the foreign reserves of the Bank of Ghana to support the economy.
The IMF board last Friday approved a bailout programme for Ghana and the first tranche of $114 million dollars out of the 914 million dollars, is expected to hit the accounts of the Bank of Ghana later this week.
But some economists have downplayed the impact of the IMF programme on Ghana’s economy saying the first tranche is insufficient to shore up the cedi.
But speaking on the Accra based Citi Fm, Mr Seth Terkper rejected such assertions.
He argued that the first “tranche is what we need and then there would be IMF review that are coming,” insisting that “What is happening to the cedi is fiscal.”
The amount he said “is not small in terms of the seize of our economy. Remember it is going to supplement what Bank of Ghana is earning already. It’s a supplement, it’s not like the only thing we are going to depend on.”
Economist, Dr Ebo Turskson had earlier downplayed the effects of the initial tranche of $114 million from the IMF, meant to be used to shore up Bank of Ghana’s declining reserves will have on the cedi.
He contends the move would not automatically lead to the rescue of the cedi which in recent weeks, has significantly declined against the dollar.
“Part of the reason why we have gone to the IMF is to stabilize our foreign currency and this is the time that our cedi has started depreciating like it did last year around the same period so we are saying that the IMF has approved this at this time but this is not going to be the solution to our cedi depreciation problem because these are short time measurement,” he stated.
The Ghanaian economy has been faced with some critical ailing conditions for some time now amidst rising inflation, a depreciating currency, high budget deficit amongst others.
According to President Mahama the decision to open discussions with the IMF was not because of the failure of government’s own home grown solutions, but rather because of the need for policy credibility and confidence from the international financial institutions, capital markets and investors for the measures being implemented to restore economic stability and growth.
“So we are going to discuss with the IMF how we can turn the deficit around quickly and create the kind of confidence even in the short-term narrative.”
<<Print>>