The government has promised that steps have been taken to stabilize the rapidly declining currency.
Charles Adu Boahen, Minister of State in charge of the Finance Ministry, predicts that by this week, the cedi will start to stabilize.
He claimed that this is so that the government “can address some of the fundamental concerns with regards to making more hard money available for imports.”
In order to stabilize the cedi, the government has a deal with mining and gas corporations that requires them to sell their foreign currency to the Bank of Ghana.
This will help “support the reserve position,” in the words of the Minister of State at the Ministry of Finance, to pay for the imports of the mining and gas companies.
Mr. Adu Boahen’s assurance follows the country’s currency depreciating dramatically over the previous six months, reaching a record high of being exchanged for one dollar at ten shillings.
Additionally, the cedi ranked second worst globally in a recent evaluation of currency performance by Bloomberg, after the rupee of Sri Lanka.
According to Bloomberg, which monitored the performance of 150 different currencies throughout the world, the cedi came in last place overall since the year’s commencement.
According to Mr. Adu Boahen, the government’s $750 million loan from the African Export-Import Bank (Afreximbank) will support the currency.
“We want the stabilization to take place the following week.
By Monday at the latest, the Afrexim facility should arrive, which will be the first step toward ensuring that stabilization takes place, he continued.
Mr. Adu Boahen attributed the cedi’s decline to “unnecessary speculative operations.”
He declared, “We think that there are lots of speculative activity that are causing some needless devaluation in the currency.
In a related event, the Council of State met urgently on Thursday with the Finance Ministry and senior BoG officials to give it a chance to comprehend the current situation.
The meeting was held, according to Nana Otuo Serebuor II, the Chairman of the Council of Status, because members of the Council are worried about the current state of the economy.
The free collapse of the cedi in relation to other major currencies, in particular, has us concerned, as does every other Ghanaian, he continued. “You know the Council of State is an advising body to the government,” he said.
The summit, according to Nana Otuo Serebuor II, underlined the root causes of the cedi’s decline and recommended short- and medium-term fixes.