BoG to hold emergency MPC meeting on Wednesday

The Bank of Ghana (BoG) will hold an emergency Monetary Policy Committee(MPC) meeting on Wednesday, 17 August 2022, over recent economic challenges.

According to the BoG, the meeting is to review recent economic developments.

Wednesday’s meeting will, among others, also focus on the depreciation of the cedis, which fell by 30 per cent in July alone.

“The meeting will conclude with an announcement of the decisions of the Committee,” a statement from the Central Bank said.

Meanwhile, the apex bank has called for calm as it explores measures to address the falling Cedi.

The regulator identified five key reasons for the woes of the local currency.

These are “the strength of the US dollar, investor reaction to Credit Rating Downgrade, Non-Roll over of Maturing Bonds, the sharp rise in crude oil prices and impact on the Oil Bill, Loss of External Financing.”

As a result, the BoG has introduced some measures to address the situation. These measures include;

1. Gold Purchase Program to increase foreign exchange reserves.
2. Special Foreign Exchange Auction for the Bulk Distribution Companys (BDCs) to help with the importation of petroleum products.
3. Bank of Ghana is entering into a cooperation agreement with the mining companies to provide BOG with the opportunity to buy gold as when it becomes available.
4. The Bank of Ghana is supporting the banking sector with foreign currency liquidity to help meet the demand for external payments.
5. The recently approved USD750,000,000 Afriexim loan facility by Parliament, once disbursed, will boost the foreign exchange position of the country and help restore confidence.
6. The Cocoa Loan is expected in the last quarter of the year. This facility will also help provide more foreign currency to help address the cedi depreciation.
7. In the short term, we expect that when the IMF programme is finalized, it will also go a long way to help restore confidence in the economy and drive portfolio flows.

The BoG said these measures would go a long way to increase the foreign exchange reserve position of the Central Bank.