President John Dramani Mahama has reassured Ghanaians of the Bank of Ghana’s dedication to keeping the exchange rate within a stable and sustainable range.
He noted that the central bank, under the leadership of the Governor and his team, is actively monitoring the market and stands ready to intervene should the exchange rate fall below expected levels.
Addressing concerns over recent currency fluctuations, Mahama advised those holding foreign exchange not to panic or fear potential losses in value, emphasizing that the situation is under control.
“I don’t envisage, as some people are saying, that the rate will drop to one cedi to the dollar. No, that’s extreme. That would virtually collapse our export sector if it happens. But I believe the Governor of the Bank of Ghana is keeping a close eye on the situation. If it falls below a certain floor, I’m confident the Bank will intervene to ensure it remains within a band that reflects the true value of the cedi against other currencies,” President Mahama said.
He added, “So don’t panic. And if you haven’t yet exchanged your dollars, I don’t know how much further down it will go, but the Governor is monitoring things closely, and we’ll see how it unfolds.”
Ghana’s local currency has been appreciating on the interbank market in recent weeks and is currently trading below GH¢11 to the US dollar.
President Mahama attributed the recent gains of the cedi to coordinated fiscal and monetary policies implemented by the Bank of Ghana and the Ministry of Finance.
“The recent appreciation of the cedi is the result of close coordination between fiscal and monetary policies by the central bank and the Ministry of Finance,” he noted.
He further explained the mechanisms underpinning the cedi’s strength, “It’s based on the forex auction system and the dynamics of demand and supply. The Bank of Ghana conducts a forex auction to determine how much cedis in the system require foreign exchange for payments. Those who need forex place bids in the auction.
“The Bank then strikes an average, collects the cedis, and allocates the corresponding dollars. So, it’s not that someone is artificially forcing the dollar down. The current rate reflects the results of the auction and market demand. I believe the rate will settle where the true value of the cedi lies, based on supply and demand,” he concluded.
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