Bank of Ghana to auction $120 million to help stabilise cedi

The Bank of Ghana (BoG) has announced plans to release some $120 million onto the market for the first quarter of this year as part of the Central Bank’s plan to help stabilize the cedi.

The auction which will be restricted to licensed foreign exchange dealing banks will see the regulator, auction $40 million in January, February and March this year, totalling $120 million.

The Central Bank in November announced that it will be auctioning part of the $2 billion, cocoa loan syndication to help stabilize the cedis.

The regulator is optimistic this intervention together with other regulatory measures will help stabilize the local currency. It has already released about $80 million to some commercial banks in the last quarter of 2016.

Some analyst says the intervention helped to reduce the cedi rate of depreciation which was very sharp in December 2016. However, this latest intervention has been met with mixed reactions.

Whiles some believe it’s a prudent decision to halt the cedi’s rate of depreciation, other think is not sustainable. Economist Ishmael Yamson believes this could rather fuel activities of speculators.

He adds that it would rather worsen the situation, this is because this s intervention will not help lessen demand for dollars, which been a major program for the economy.

Story by Ghana | Myjoyonline.com