Monday, 17 June

It's needless rushing for dollars – Finance Minister says $2.32bn coming soon to stabilise cedi

Finance Minister Dr Mohammed Amin Adam

Finance Minister Mohammed Amin Adam has urged Ghanaians to stay calm amidst the recent rush for foreign exchange, which, according to him, has caused the cedi to lose value against major currencies of trade.

During the Ministry of Finance’s Monthly Economic Update on Friday, May 24, 2024, Dr. Amin Adam explained that the current exchange rate pressures are due to the strengthening of the US dollar, seasonal forex demand, and other temporary factors.

He reassured the public that the government is taking strong measures to ensure stability.

“There is no need to rush and buy forex,” he advised, noting that at least $2.32 billion is expected to flow into the country by the end of the year.

This money will come from various sources, including disbursements from the IMF and World Bank, the Gold-for-Oil Programme, the Bank of Ghana’s Gold for Reserves programme, and proceeds from Cocoa Syndicated Funds.

“We expect total disbursements of at least $2.32 billion before the end of the year, which will add to the significant foreign exchange reserves already built up by the Bank of Ghana,” he added.

While acknowledging recent pressures, Dr. Amin Adam remained optimistic about the cedi’s medium-term stability.

As of May 20, 2024, the cedi’s depreciation stood at 14.2%, compared to 20.7% in the same period in 2023.

He anticipates further stability as the government completes debt restructuring, advances fiscal consolidation, and boosts the country’s reserves.

The minister also highlighted the progress made under the IMF-Supported Post-COVID-19 Programme for Economic Growth (PC-PEG).

Following a successful 2nd Review Mission by the IMF in April 2024, Ghana secured a Staff Level Agreement, setting the stage for the IMF Executive Board to consider and approve the disbursement of a third tranche of $360 million in June, bringing total disbursements to $1.56 billion.

“The positive results of the first and second reviews of the IMF-supported Programme show that we are achieving our goals of restoring macroeconomic stability and debt sustainability,” Dr. Amin Adam said.

He pointed to the resilience of the economy, noting a 2.9% GDP growth in 2023, which exceeded both the original projection of 1.5% and the revised projection of 2.3%.

The Minister assured that the Ministry of Finance is working closely with the Bank of Ghana to address the Cedi’s depreciation. This includes speeding up fiscal consolidation, intensifying the Gold-for-Oil and Gold for Reserves programmes, and strategic foreign exchange interventions by the Bank of Ghana.