BoG intervened to belittle the cedi – NDC disputes Veep claims

Company News of Thursday, April 4, 2019

Source: Myjoyonline.com

2019-04-04

The opposition, the National Democratic Congress (NDC), insists that the Bank of Ghana (BoG) used the country's foreign exchange reserves to consolidate the cedi into depreciation.

According to Ajumako-Enyan-Asiam Member of Parliament Ato Forson, the figures on the BoG website contradict the Vice President's presentation at the town hall meeting on Wednesday.

The Minority Finance spokeswoman said the BoG figures clearly showed that Ghana's reserves were used to consolidate the cedi.

Mr. Forson, former Deputy Minister of Finance, said of the data on the BoG website: "In December 2018 and January 2019, net international reserves rose to 3.8 billion GHC … from 3 , 8 billion GHC at 3.173 billion.

"This clearly shows that an amount of 700 million GHC and more was used for the purpose of intervention in the currency," he added.

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 5.2 from Thursday.

Dr. Mahamadu Bawumia at the public session during the NDC's protest dispute said that the idea that the Security Council would have used the reserves to overthrow the cedi "would not be wise".

"The reason for the strong reversal of the cedi depreciation we observed is that the market is corrected on its own. The sentiments, expectations and uncertainties of investors have recognized that the fundamentals are much stronger than they suspected and that even without the IMF's fiscal and monetary discipline they are badured. "

Mr Bawumia added that the BoG would not have been able to use the reserves because, as part of the IMF's requirements for the conclusion of its program, the Central Bank had to increase its net international reserves by December 2018 , what was done.

"Increasing international net reserves to about $ 800 million, however, meant that 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," added the vice president.

But Mr. Forson wondered why the reserves had been reduced if they were not used to save the depreciating cedi.

"Says he said he [Dr Bawumia] not using money for the purpose of the intervention, he should tell us where the money is.

"I know that they have used it for intervention purposes and the data do not lie. In fact, he's lying to us all and his credibility has now been called into question, "he said.