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The Bank of Ghana (BoG) is strengthening its foreign reserves to help stabilize the cedi amidst its recent depreciation against major currencies, with demand for foreign exchange expected to increase as the festive season approaches.
This strategic move by the Central Bank seeks to reassure businesses and consumers by working to stabilize the local currency, which has been under pressure in recent months. Currently, the cedi is trading close to GHS 17 to a dollar in the forex market, showing a year-to-date depreciation of 24.3%.
Dr. Ernest Addison, Governor of the Bank of Ghana, emphasized that building up reserves is essential to stabilizing the cedi and protecting the economy. “Some are praying that the cedi will recover to GHS 10.00 to a dollar. These are the problems in our economy, the issues about the exchange rate and financial sector issues. But I think the good news is that we are making progress because the developments we are seeing are not different from other jurisdictions,” he stated.
Dr. Addison stressed the importance of staying focused and implementing the right policies to build economic buffers, saying, “So, we need to stay focused and implement the appropriate policies and build buffers to be able to support the progress we have made.”
He further highlighted the significance of this approach for investor confidence and overall economic stability. “We have $7 billion dollars in foreign exchange reserves. If I want to drive the dollar-cedi rate at GHS 10, I can do that tomorrow. But what about the day after tomorrow? So, we are balancing various factors, trying to build reserves and managing the exchange rate. So, all is not lost yet, there is some silver lining in the cloud, hopefully we will see the appreciation of the currency,” Dr. Addison added.
He shared these insights at the launch event for The Concise Law of Banking, a book authored by private legal practitioner Afua Appiah-Adu. The book, commissioned by the Institute for Law & Development (ILAD), serves as a practical guide to banking law, suitable for students, banking professionals, lawyers, and others seeking to understand banking law principles.
The Concise Law of Banking covers essential topics in banking law, including bank regulation, supervision and licensing, the banker-customer relationship, electronic payment systems, offshore banking, credit reporting, lending, and anti-money laundering. This comprehensive manual serves as a valuable resource for understanding core aspects of banking law.
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