I didn't anticipate government reserves will be burnt to revive the cedi – Bright Simons

Vice President of policy think tank IMANI Africa has stated his amazement about the current fast run of the cedi against the dollar.

According to him, it came as a surprise to realize that the government is using its reserves to strengthen the dollar.

In a tweet on December 19, 2022, he wrote: “Okay, I was wrong. I told folks at various times that the govt of Ghana will not suspend payments on the external debt until it formally engages creditors on a plan next year. I did not anticipate that it will burn thru its reserves to reinforce a run on the dollar.”

The Ghana cedi has, in the last two weeks, gained about 63% against the dollar. The currency raced from behind to become the strongest performer against the dollar in the past week.

The government has associated the appreciation with the announcement of the debt exchange programme and the staff-level agreement reached with the International Monetary Fund.

Meanwhile, President Nana Addo Dankwa Akufo-Addo has stated that the appreciation of the cedi against all major trading currencies is a result of deliberate policy interventions introduced by the government over the last few months.

According to President Akufo-Addo, “the strengthening of the cedi has not happened by chance, but through the implementation of deliberate policies by Government, in collaboration with the Bank of Ghana.”

Okay, I was wrong. I told folks at various times that the govt of Ghana will not suspend payments on external debt until it formally engages creditors on a plan next year. I did not anticipate that it will burn thru its reserves to reinforce a run on the dollar. ????????‍♂️#EatHumblePie pic.twitter.com/MO6VO6w9Vl

— Bright Simons (@BBSimons) December 19, 2022

Just to be clear, I was not the only observer who credited government of Ghana with excessive goodwill. pic.twitter.com/2N8ICUBYZd

— Bright Simons (@BBSimons) December 19, 2022