How long can 'pumped' $2bn into economy save depreciating cedi? - John Kwakye asks govt

JOHN Kwakye 1 IEA Director of Research, Dr John Kwakye

Wed, 24 Aug 2022 Source: www.ghanaweb.com

Director of Research at the Institute of Economic Research (IEA), Dr John Kwakye, has wondered how long the $2 billion government wants to inject into the economy can save the local currency - cedi - from further depreciation.

According to him, receiving more dollars in the country can help strengthen the cedi but a lot more needs to be done to avoid further depreciation.

In his view, until the structural problems of the economy are fixed, the economy will keep wobbling at some point.

Speaking on TV3's Ghana Tonight show on Tuesday, August 23, Dr Kwakye said, “The $ 2 billion can make a difference but for how long? Unless you address the structural problems, the fact that we don’t earn foreign exchange on our own...Until we address the underlying structural problem, we can stabilise the Cedi for a while but for how long.”

It would be recalled that the Information Minister, Kojo Oppong-Nkrumah, on Tuesday, August 23, 2022, announced that government is expected to inject some $2 billion into the economy.

Kojo Oppong-Nkrumah said the 750 million dollars expected from the Afremix Bank will hit the accounts of the Bank of Ghana this week, whilst the cocoa syndicated loan will add $1.3 billion.

The cedi has since the start of this year suffered persistent depreciation against major trading currencies, especially the US dollar.

As of July 2022, the cedi lost its value by more than 20 percent.

The local currency is now trading above GH¢10.00 to one US dollar on the exchange rate market.


Source: www.ghanaweb.com