Ranking Member of Parliament's Finance Committee, Isaac Adongo, has opined that the Bank of Ghana does not have the requisite capacity to intervene in the depreciation of the cedi against major trading currencies.
He believes that despite the approval of an IMF-supported programme for Ghana, the Central Bank is now required to build reserves to about $1.74 billion by the end of 2023 without having to use these reserves to support the market.
Making his submission on Metro TV’s Good Morning Ghana show, the Bolgatanga Central lawmaker said these funds will fall under the economic support programme from the IMF and World Bank which simply indicates the Central Bank has no reserves of its own.
“What this simply means is that the BoG does not have enough reserves on its own and this also means that the Central Bank must suspend the parallel arrangement where it has its own forex interbank rates and forex bureaus having their own rates.”
“It is important for the BoG to harmonise and unify the forex rates because it [Central Bank] is using that to cook up figures to more or less influence the rates. BoG cannot intervene in stability depreciation of the local currency against major if it continues on this path,” he noted.
Mr Adongo further noted that the IMF programme does not envisage that Ghana will go to capital markets for borrowing over the next three years and therefore urged the Bank of Ghana to implement strategies to stabilise the local currency.
Watch the video below:
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