BoG did not spend any reserves to stabilize the Cedi – Bawumia

Vice President Dr. Mahamudu Bawumia has dismissed claims that the Bank of Ghana spent reserves to revive the Cedi when it depreciated against some foreign currencies especially the Dollar.

According to him, “some persons have misunderstood the requirement by the International Monetary Fund(IMF) to build up its reserves by some $800m to mean that the Bank used $800m to reverse the Cedi depreciation.”

Addressing a Town Hall Meeting at the College of Physicians and Surgeons in Accra on Wednesday, April 3, 2019, Vice President Dr. Bawumia who’s the Head of the Government’s Economic Management Team, stated that if the Bank of Ghana were to have done that it “wouldn’t be wise.”

“The reason for the sharp reversal of the cedi depreciation that we observed was that the market corrected itself. Investor sentiments, expectations, and uncertainties acknowledged that the fundamentals are much stronger than they suspected and even without the IMF fiscal and monetary discipline are assured.

Dr. Bawumia added: “The reversal of the depreciation that has taken place supports the fact that the fundamentals are indeed strong. We should recall ladies and gentlemen that the weak fundamentals in 2014 meant that the NDC government of the day had to end up seeking an IMF bailout. The difference today is stark and glaring because our fundamentals are strong Ghana only yesterday exited from the IMF programme.”

The Cedi in the early part of the month of March fell deeply against international currencies especially the dollar, by some 5 percent trading at around GH¢5.90. It, however, begun to record some marginal appreciation against the dollar. As at today, April 3, the Cedi is trading 5.36850 to the Dollar.