The Bank of Ghana has called on the general public to remain calm as it moves ahead to implement pragmatic measures aimed at addressing the persistent depreciation of the local currency.
This comes after huge public outcry, over the fall in the cedi, especially against the US dollar and other major trading currencies.
In a note sighted by GhanaWeb, the central bank said it was increasing foreign currency (FX) supplies to banks in the short term in order to help meet growing FX demands for external payments.
The BoG explained the move to increase FX supply was due to rising demand for hard currencies by non-resident investors leaving the country.
Providing further reasons for the persistent fall of the cedi against major trading currencies, the Central Bank said high crude oil price has resulted in a significant hike in the country’s import bill, forcing the bank to churn out more hard currencies to meet demand.
It said other factors, including the rebound in the strength of the US dollar, were causing the cedi to depreciate at faster pace.
“The US dollar has become stronger, making other currencies including, the cedi weaker. From the beginning of the year to date, the pound sterling has weakened against the US dollar by 10.8 percent while the euro has also weakened by 10.1 percent,” the BoG said.
“Countries similar to Ghana are all experiencing sharp depreciation, averaging 11.5 percent from year-to-date,” the central bank explained.
The BoG added that other factors such as credit downgrades on Ghana's economy has impacted the investor community at large.
“Non-rollover of maturing bonds by non-resident investors, high crude oil prices and loss of access to the external market for borrowing,” the BoG outlined.
Meanwhile, the BoG has given the assurance that it is implementing measures aimed at addressing the fall of the cedi against major trading currencies.
Since the start of this year, the cedi has recorded a free fall against major trading currencies as demand for forex overtook supplies during a period when high debts and low investor confidence have made it impossible for Ghana to access the international capital market for borrowing.
As of July, this year, the cedi lost its value by more than 20 percent. The local currency is now trading above GH¢9.00 to one US dollar on the exchange rate market.
The Bank of Ghana Headquarters