Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has said the Central Bank has enough liquidity to keep things relatively stable till the anticipated IMF programme kick-starts and financing assurances expected from other partners also come in.
The Governor made this statement when the management of the Bank met with stakeholders within the foreign exchange market, including the Managing Directors of the universal banks in the country and the Association of Forex Bureau Operators to deliberate on measures to streamline, sanitise and provide clarity on the supply of forex in the country.
In his opening remarks, the Governor of the BoG, Dr Ernest Addison, acknowledged that though the global economic meltdown occasioned by the geo-political tension between Russia and Ukraine had caused supply-demand imbalances in several commodity markets, high inflation, high-cost of living and high uncertainties in financial markets, the BoG was poised to work with relevant stakeholders to stabilise the foreign exchange market and help contain the fall in value of the cedi.
“Available data indicate that we started the year GH¢6 to the dollar. It got to GH¢7 and we stayed at GH¢7 in June, GH¢7.6 in July, GH¢8 in August, GH¢9.6 in September and now it is GH¢12.5. But we are here again with people sending messages that the dollar-cedi rate is GH¢15 to a dollar.
“Clearly, this type of movement does not reflect changes in the fundamentals. It is clear that the market is not functioning properly. We are seeing speculations taking over under very disorderly market conditions and it appears now the black market is rather driving exchange rates. This we cannot allow to continue,” he said.
The Governor further said that “as we are all aware, we got the $750 million from the AfriExim Bank and I think today [October 26, 2022], we are supposed to receive the $790 million from the COCOBOD syndicated loan so the Central Bank has some liquidity”.
“I am aware of the recent developments in terms of liquidity in the banking sector. As I said, I took note of the advice from Washington on the financial stability issue that there has to be targeted liquidity support to preserve financial stability without undermining the inflation control objectives. So this is really the context we should have the discussion on all the complaints of we need liquidity and BoG not supplying liquidity.
“Yesterday I met the CEOs and I have assured them that we will provide the necessary liquidity to ensure that we don’t have a system of a liquidity problem. But we do that within the context of keeping inflation low”.
Present at the meeting were Managing Directors of the Universal Banks in the country, led by the President of the Ghana Association of Banks and CEO of the Stanchart Ghana , Ms. Mansah Nettey.