The Bank of Ghana says it intends to build additional reserves of up to 300 million cedis to stabilize the country’s currency.
This will be a medium-term solution to prevent the free fall of the cedi.
The currency has performed marginally well within the first half of the year, compared with other major currencies such as the US dollar and the Euro.
There has been reduced export earnings coupled with limited revenue from the country’s oil reserves due to the impact of the Covid-19 pandemic.
Currently, the cedi is trading at 5 cedis 68 pesewas to a dollar and to the Euro at 6 cedis 68pesewas, and 7 cedis 32 pesewas to the pound.
Governor of the Central Bank, Dr. Ernest Addison, says various strategies are in place to keep the cedi stable against major trading currencies.
“For the half year period had zero balance and we are hoping that we will be able to build some additional foreign exchange by the end of this year. The target is to build additional reserves of about three hundred million cedis. So this is really the essence of trying to build reserves and that should improve our ability to have a reasonably stable currency. Obviously the outcome also depends on the principal, export earnings that we have as a country. Considering what happened to oil export receipts, if we do not see an improvement in revenues from oil that will become more challenging so those are the considerations” he explained.
In January 2020, the Finance Ministry set up a committee to look into the causes of the depreciating cedi and find solutions to them.
At the time, the cedi was performing poorly against major trading currencies.