The Bank of Ghana (BoG) has assured the general public and businesses not to panic because it has enough dollars to meet their demands and support the cedi.
The assurance follows what has been described as sustained depreciation of the cedi over the past week.
As at close of business on November 17 some banks were quoting ¢4.56 against a dollar with some analysts describing the cedi’s performance as the worse for the year.
A lot of reasons have been given for the current woes of the Ghana cedis.
According to some market players, the cedis’ challenge came about as a result of the sudden pick up in corporate demand of the American currency, which was not met with the required supply on the market.
Some of the traders with the commercial banks have also told JoyBusiness that the heightened demand has also been influenced by attempts by traders to quickly clear their imports before the Chinese holiday season.
Some traders of the commercial banks have also argued that there has been little intervention by the Central Bank to help deal with the situation.
However, persons close to the BoG have rejected this argument insisting that most of these demands are not backed by “real demand” from businesses.
Bank of Ghana on the current situation
According to the Bank of Ghana, it is currently on market to support the banks with the required dollars, a development they believe would help stabilize the situation very soon.
Head of Financial Markets at the BoG, Stephen Opata told JoyBusiness that looking at their reserve position, there is no way the situation would get out of hand.
“Generally, our external position is very good compared to same period last year, and we expect to end the year by building reserves of $650 million,” he said.
He added that “we expect to end the year with a current account surplus, so in general, the external position is good, our reserves as at now is $7.29 billion which is equivalent to 4.1 months of import cover”.
Mr. Opata said these numbers should convince everyone that the Central Bank reserves are in a good position to stabilize local currency, therefore there is no need to panic.
Regarding whether the lender of last resort is going to increase its intervention if the situation gets out of hand, he said, “I don’t expect it to get out of hand.
“But if we observed increase volatilities than we are comfortable with, of course, we will sell more dollars to ensure that there is not too much volatility that we are not comfortable with.”