The local currency has crossed GH¢10 to one dollar mark on the retail market.
Some forex bureau and banks within the capital are selling a dollar for GH¢9.98 whilst others are selling it for GH¢10.10.
According to some of the forex bureau operators, there is also a shortage of the dollar on the market.
They also say that the situation is bad and could get worse in the coming weeks.
Data from the Bank of Ghana indicates that the Cedi has lost more than 25 percent of its value year to date.
The deterioration of the local currency on the financial market is largely due to, among other things, the uncertainty about Ghana's fiscal outlook as well as low investor confidence that has made it impossible for the country to access the international capital market for borrowing.
The situation also comes after the Bank of Ghana announced an increase in the monetary policy rate by 300 basis points.
This intervention, according to the Central Bank, is part of efforts at taming the soaring inflation and the fast-depreciating local currency.
Reacting to this situation, Economist, Courage Boti stated that it will take some time for the interventions to materialize.
“It is still a matter of demand and supply. For over eight to nine weeks now, the Bank of Ghana has not done any spot market interventions. These are also residual demands on the market that are driving the rate higher. Until that backlog is cleared, some of these issues will linger.”
“Also, some of the interventions are yet to be implemented. For instance, investors will be looking at our reserves that is, at 7.6 billion, and our net reserves at 3.7 billion which is short of what it was in the past. These are the fundamentals that will continue to drive the market until something changes. Immediately, the decision by the Central Bank to raise the policy rate yesterday means it will take some time for liquidity to be mopped up. This will show in the gradual upward adjustment of the interbank interest rate. So its effect will come over time,” he said.
After its emergency meeting on the 17th of August 2022, the Bank of Ghana introduced measures including working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.
This it believes, will strengthen the central bank's foreign exchange auctions, and consequently the cedi.
Other interventions by the Bank of Ghana to address the situation
• The recently approved USD750,000,000 Afriexim loan facility by Parliament, once disbursed, will boost the foreign exchange position of the country and help restore confidence.
• The Cocoa Loan is expected in the last quarter of the year. This facility will also help provide more foreign currency to help address the cedi depreciation.
• Gold Purchase Program to increase foreign exchange reserves.
• Special Foreign Exchange Auction for the Bulk Distribution Company's (BDCs) to help with the importation of petroleum products.
• Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as when it becomes available.
• The Bank of Ghana is supporting the banking sector with foreign currency liquidity to help meet demand for external payments.
• The IMF programme once finalised, will also go a long way to help restore confidence in the economy and drive portfolio flows. These measures will go a long way to increase the foreign exchange reserve position of the Central Bank.