We are in a good position to manage foreign exchange market shocks – BoG

Business & Finance Bank of Ghana Governor, Dr. Ernest Addison
Bank of Ghana Governor, Dr. Ernest Addison

The Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has disclosed that the country’s foreign reserves have been improved.

According to him, the improved reserves will ensure shocks in the foreign exchange market can be managed.

“The Bank of Ghana, however, has adequate reserves to manage these shocks to the foreign exchange market, having added over US$600 million to the current foreign exchange reserve levels over the first five months of the year.

“The improved reserves position is also backed by strong liquid monetary gold levels of over 26.6 tonnes (estimated at US$2.1 billion) as a result of the very successful domestic gold purchase programme,” Dr. Ernest Addison said.

The Bank of Ghana Governor was speaking at the 118th Monetary Policy Committee Press conference in Accra on Monday, May 27.

This comes to allay the fears that Ghana’s foreign exchange reserves have depleted.

The worry had stemmed from the alarming depreciation of the Ghanaian cedi against the international currencies.

For Prof. Patrick Asuming who is a Professor at the University of Ghana Business School, there is a need for the country to assess and identify what is causing the depreciation of the cedi.

“You have to look at where this rapid depreciation is coming from. Generally, the balance between our imports and exports is really the long-term driver of the currency, that’s usually true. So, in a typical year, the Cedi will depreciate 5 percent.

“In our case, when you look at our trade balance compared to last year, our trade balance is lower. I think last year, in the first couple of months, our trade balance was about 1.1 percent of GDP. This year is 0.5 percent but we are still expecting more than we are importing, you do see that this year the first couple of months, our import bill is almost twice what we did last year. so there is this part,” Prof. Patrick Asuming said.

Eric Nana Yaw Kwafo
Eric Nana Yaw Kwafo

JournalistPage: EricNanaYawKwafo