Cedi stability against the dollar
The Ghana cedi continued its fine performance in the retail market last week clawing back some gains against the US dollar amid improved market liquidity.
This week the Bank of Ghana plans to auction the fourth US$20 million to the Bulk Oil Distribution Companies (BDCs) in 2025. Analysts expect the auction to address market demand and make room for the cedi to remain stable this week.
Looking at the rate in which goods and services are moving up in the country, due to the cedi-dollar volatility, the disclosure by the BoG governor that his outfit intends to priority six areas to help reform Ghana’s financial sector and stabilise the cedi against the dollar.
Though official figures released by the Ghana Statistical Service indicate that consumer inflation has declined, the reality on the ground does not reflect it.
But can we blame the Oil Marketing Companies (OMCs) for the arbitrary increment in fuel prices? The answer, we dare say, is a very big No! These OMCs rely on the US dollar to import the commodity into the country and since the cedi-dollar rate has shot up, it will definitely affect prices of fuel they import into the country as well.
Our concerns are that since the BoG is aware of the situation, one would have expected the apex bank to put pragmatic measures in place to stop the free fall of the cedi, but this never happened. If the BoG can build, up its reserves as the former governor Dr Addison told the world some time ago, why didn’t he put those measures in place, but sat down for the cedi to fall flat?
Much as we can blame the Russian-Ukraine war and the instability currently being experienced in the Middle East, the hub of world oil production, we, as a country, could have still done something to ameliorate the suffering of the people. But as adage goes, better late than never – now that that the BoG may be about to wake up from its ‘slumber’ and has decided to boost our reserves, we can only hope that better news comes out of it. If the BoG will be able to deal with the situation as it is promising, it will be good news, but should they fail, then we are in for serious trouble especially with a new governor at the helm, no doubt about that
