Dr. John Kwakye, an economist consultant has described as sustainable, measures adopted by the government to tackle the fall of the cedi against major trading currencies.
Dr. John Kwakye, senior economist said the injection of some $800 million of reserves from the Central Bank into the economy to stabilize the currency is good.
“Currently we have a storm taking place so we need to try and calm the storm. That’s why I can understand the short-term interventions that they are talking about.
“In other words, try and find some foreign exchange and try and inject into the system. We do that when we experience shocks from time to time,” he said.
The local currency is still struggling to stabilise against the major international currencies with the US dollar, selling at between GH¢5.6 and GH¢5.7.
This same period last year, the cedi was sold at GH¢4.42 and GH¢4.27 in January 2017, prompting fears that the situation may get worse if long-term measures are not put in place.
“he cedi is an inherently weak currency “and it will continue to depreciate” because “the fundamentals will always kick in,” he said on Citi TV.
BoG pumps $800 million to halt cedi depreciation
The Bank of Ghana announced that it will release some $800 million onto the market to curb the cedi’s depreciation.
The Central Bank said it expects the cedi to stabilise against major international currencies especially the dollar.
According to the Head of Financial Markets at the central bank, Steven Opata, the accumulation of more dollars would help increase the net international reserve (NIR) to around $4 billion, enough to provide confidence in the system and help stabilise the free fall of the local currency.
He said one of the strategies it was adopting “is rebuilding reserves to face more systemic shocks that may come.”
“I am very optimistic that it will not be long before we see stability and some recovery in the cedi,” he added.