Actions of currency speculators influencing cedi's free fall – Finance Minister

Dr. Mohammed Amin Adam, Minister of Finance

The Finance Minister has blamed currency speculators for influencing the free fall of the cedi against major trading currencies in recent times.

Addressing stakeholders at the monthly briefing on the economy on Friday, May 24, Dr. Mohammed Amin Adam attributed the recent depreciation pressures on the cedi partly to high liquidity in the system and speculative activities by some players in the forex market.

"The recent pressures we are observing on the cedi is largely on the back of the strengthening of the US Dollar against major trading currencies, seasonal forex demand including elevated demand from corporate institutions, payment to contractors and to IPPs, high Cedi liquidity and speculation," the Finance Minister noted.

He added that "We wish to assure Ghanaians that there is enough foreign exchange supply. Hence, there is no need to rush and buy forex."

The cedi has been under severe depreciation pressures in recent months, losing about 15% of its value against the US Dollar since the start of the year.

The central bank has been forced to intervene repeatedly to stabilize the currency.

However, according to Dr. Amin Adam, speculative activities have contributed to the cedi's woes, pushing demand higher and worsening the depreciation trend.

"The Ministry of Finance is working with the Bank of Ghana to implement measures to address the depreciation of the Cedi. These measures include intensification of the gold-for-oil programme, and appropriate FX interventions by the BoG," he told stakeholders.

The Finance Minister assured that foreign exchange inflows expected in the coming months will help shore up reserves and arrest the depreciation of the local currency.