Bank of Ghana ramps up reserves to tackle cedi depreciation ahead of holiday demand

As the festive season approaches, the Bank of Ghana (BoG) is moving to bolster its foreign reserves to curb the rapid depreciation of the cedi.

With the local currency trading at nearly GH¢17 to the dollar and marking a 24.3 per cent drop this year, the BoG aims to ensure stability amid growing demand for foreign currency.

Speaking at the launch of ‘The Concise Law of Banking,’ a newly published banking law guide, Dr. Ernest Addison, Governor of the BoG, outlined the strategy to counter rising economic pressures.

“Some are praying that the cedi will recover to GH¢10.00 to a dollar. These are the problems in our economy. The issues about the exchange rate and financial sector. But I think the good news is that we are making progress because the developments we are seeing are not different from other jurisdictions,” he stated, addressing ongoing challenges to the economy.

Dr. Addison explained that BoG’s approach balances the need to strengthen reserves with prudent currency management, striving to foster longer-term stability and investor confidence.

“We have $7 billion in foreign exchange reserves. If I want to drive the dollar-cedi rate to GH¢10, I can do that tomorrow. But what about the day after tomorrow? So, we are balancing various factors, trying to build reserves and manage the exchange rate. All is not lost yet; there is some silver lining in the cloud,” Dr. Addison said, signalling cautious optimism for potential currency appreciation.

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