Bank of Ghana has not spent $ 800 million to counter the fall of the Cedi – Bawumia

General News of Wednesday, April 3, 2019

Source: dailyguidenetwork.com

2019-04-03

Vice President Mahamudu Bawumia refuted claims that the Bank of Ghana would have spent $ 800 million to cancel the current cedi write-down.

He added that, contrary to speculation, the BdG has not spent any reserves to revive the cedi after the initial fall.

"Thus, the idea that the BoG used 800 million dollars to reverse the depreciation of the cedi, which would not be wise, revealed that the market had corrected itself, thus correcting the investors' feelings, expectations and uncertainties, recognizing that the fundamentals were much stronger than expected "I said.

The beginning of the year 2019 was characterized by a sudden depreciation of the cedi. In a week, the cedi climbed to nearly 5.9 percent of the dollar.

The cedi is however appreciated at around 5.07.

Explaining the situation, the Vice President revealed that the Bank of Ghana, as part of the IMF's requirements for the completion of its program, had to increase its net international reserves up to December 2018 volume.

"However, to increase net international reserves to about $ 800 million, the Bank of Ghana could not sell any foreign exchange in the market, it had to basically hold hands and could not intervene in the market during that period.

As a result, demand for money has not been met as usual and rates have risen. Once the target of the reserves reached, we met the IMF, "he said.

Therefore, he recalled that the weakness of the fundamentals in 2014, which led to the mbadive fall of the cedi, forced the NDC government to seek an IMF bailout. "The difference is today blocked because our fundamentals are strong."

Ghana is officially out of the IMF program only yesterday.