The Finance Ministry and the Bank of Ghana (BoG) are expected to form a bipartisan committee to investigate the structural causes of the depreciation of the Ghanaian cedi.
Finance Minister, Ken Ofori-Atta made this known in an address to lawmakers in Parliament today, March 28, 2019, on Ghana’s successful completion of the International Monetary Fund (IMF’s) Extended Credit Facility.
His address also focused on Ghana’s historic $3 billion Eurobond, and recent developments on the foreign exchange market and the Ghanaian cedi.
According to the Minister, he had been tasked by President Nana Akufo-Addo to investigate the structural causes of the fall in the value of the cedi in comparison to major international trading currencies like the US Dollar,British Pound and Euro.
On 2nd January, the cedi sold at GH¢4.83 to a dollar, losing value without fail to end January at GHC 4.95.
The loss continued through February beginning at GHC 4.95 to a dollar and hitting GH¢5 by February 9th.
Ending February at GH¢5.16 to a dollar on the interbank foreign exchange market, it further depreciated by 8 pesewas to reach GH¢5.24 by March 12 and continued to maintain that position for close to a fortnight before taking an ascent to sell at GH¢5.16 on March 22, 2019.
Mr. Ofori-Atta indicated that government recognized the need to take steps to control the free fall of the cedi.
“The Governor and I will put a bipartisan committee together to proceed immediately,” he said, while recounting President Akufo-Addo’s instruction for a structural investigation.
He stated that the Bank of Ghana will remain vigilant in the short term to build adequate reserve buffers and promote macro discipline in the forex market.
The minister spoke about the need to promote export and reduce import as well as diversify the country’s trade.
He also encouraged the patronage of locally made goods like kenkey, waakye, saying “we need to grow more, manufacture more.”
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