BoG Governor to meet banks and operators of Forex Bureau over cedi depreciation

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, will on Tuesday meet managers of banks and operators of forex bureaux to address the depreciation of the cedi.

The meeting is also supposed to fix what the banks say is the overpricing of the dollar on the market.

The local currency has depreciated further to sell at ¢15.20 to one US dollar.

This is about 3.4% depreciation in less than a day, after trading on October 24, at ¢14.70.

Information Minister, Kojo Oppong Nkrumah at an emergency news conference outlined plans by the government to respond to the depreciation of the Ghanaian currency.

“The Bank of Ghana will be meeting the Managing Directors of some of the banks and the heads of the Forex Bureau Associations for a series of discussions aimed at ensuring that the supply of forex onto the forex markets is stabilised and the overpricing is also halted and that people who need access to Forex for legitimate transactions can get same without hindrance in the banking halls and other Forex bureaus as against on the black market,” he said.

The Minister noted that the Economic Management Team is also meeting to apprise itself of some recommendations from Economists after which Cabinet will meet with the President from Thursday to Saturday to receive updates on the IMF negotiations and what the Economic Management Team has put together so far.

According to him, after all meetings have been held, President Akufo-Addo will then address the nation on measures taken to revive the ailing economy.

The Minister explained that the government is strategizing to deal with the speculation around the dollar.

“In the engagement between the central bank and the banks and the forex bureau if indeed, one of the things they want to do is to streamline where they can get the knowledge of the specific rates on a daily basis and where all of you can know of the official rates are on a daily basis, it can help in curbing a bit of that speculation,” he added.

Meanwhile, a Global leader in financial services and US firm, JP Morgan has blamed the cedi’s performance on the Bank of Ghana’s decision to purchase dollars from mining and oil companies, inadvertently reducing forex availability within the inter-bank market is one of the reasons behind the falling value of the cedi.

“The cedi has now weakened by around 60% against the US dollar this year, as uncertainties about the need for, and extent of, debt restructuring increased. The drain of FX reserves year-to-date means the Bank of Ghana (BoG) now has limited firepower to smooth FX volatility.

“However, we believe the main trigger for the move to 14.875 (mid) in a spot over recent days can be traced to BoG’s decision to purchase dollars from mining and oil companies, inadvertently reducing FX.”