The Bank of Ghana (BoG) has clarified that daily fluctuations in the value of the Ghana Cedi are standard features of the country’s currency system, emphasizing that official concern only arises when there is excessive volatility.
Speaking at the 130th Monetary Policy Committee (MPC) press conference in Accra on Wednesday, May 20, the Governor of the Bank of Ghana, Dr. Asiama, explained that Ghana operates a managed float system rather than a fixed exchange rate regime, which naturally allows the currency to appreciate or depreciate marginally.
“We have always said that the framework that we have is a managed float; it is not a fixed exchange rate regime, so the Cedi is expected to move on a daily basis. expect the cedi to move; it can depreciate, it can appreciate. Our concern is to avoid excessive volatility,” he said.
Dr. Asiama noted that while there has been a recent surge in foreign exchange demand, it must be viewed within the context of current global economic conditions. He pointed out that international geopolitical disturbances have disrupted trade and altered oil prices, requiring significantly more foreign currency to import the same quantities of goods.
“So we haven’t announced that we are keeping a fixed exchange rate, but it is okay for the cedi to be flexible. It is true we have observed a surge in demand in recent weeks, but remember the times we are in,” he added.
“The geopolitical disturbances out there have an impact in terms of oil prices and trade distortions. What that means is that the same volume of crude oil is costing twice or more by way of foreign exchange,” he said. “So you can imagine why there is great demand for FX, therefore summing up the depreciation pressure. on the cedi,” he said.