Speaking at his maiden press briefing at the Jubilee House on Wednesday night, President Mahama acknowledged that the Bank of Ghana had recently intervened in the forex market to slow the rapid fall of the cedi. The move temporarily strengthened the currency but, according to him, also caused an artificial overvaluation.

“The intervention was meant to stop the steep depreciation of the cedi. In 2024 alone, we saw a 25% decline in just the first half of the year, which made planning extremely difficult. But now, the Bank of Ghana has withdrawn from the market to allow the currency to find its natural value,” President Mahama explained.

He assured that, despite current volatility, government will roll out measures to stabilize the cedi, with the Bank of Ghana tasked to keep depreciation within the 5% threshold per year.

“The cedi is readjusting, and I believe it will settle at a certain rate. We will make sure that any depreciation in the value of the cedi stays within about 5% per annum,” he stated.

However, critics remain sceptical about the practicality of the directive, questioning whether the Central Bank can maintain such a strict target under current economic pressures.

source: myjoyonline

Two dissenting members proposed deeper cuts: one for a 350-basis-point reduction to 24.5%, citing inflation above the medium-term target, and another for a 250-basis-point cut to 25.5%, highlighting similar inflation risks. The MPC, per the Bank of Ghana Act, includes the Governor, two Deputy Governors, the Head of Banking Operations, and two Finance Minister appointees.

The Bank of Ghana rate cut signals cautious optimism. Stay updated on its impact on Ghana’s economy!

source: myjoyonline