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President of the Ghana Union of Traders Association (GUTA) Dr Joesph Obeng has attributed the strength that the Cedi is gaining lately against the Dollar to the positive speculation surrounding the bailout that Ghana is seeking from the International Monetary Fund (IMF).
He explained that the economy dwells on speculations hence when the speculations are positive, they naturally improve the system but when they are negative, confidence in the economy dips.
Per the Bank of Ghan rate, as of Wednesday, May 17 the Cedi was buying at 10.9538 and selling at 10.9648 to a Dollar
Bank of Ghana Exchange Rates pic.twitter.com/NXEc2qizUy
— Bank of Ghana (@thebankofghana) May 17, 2023
It used to hover around 12.5 per Dollar.
Dr Joseph Obeng said “It has not been stable for the last couple of weeks, it goes up a little, it comes down and then it will stabilize somewhere at 12.5 and now we see the sharp decline primarily due to the positive speculation.
“Our economy dwells on speculation…this particular time we are also denying the positive speculation around the IMF deal.”
Asked whether this trend will lead to a reduction of prices of good and services, he said “Now it will be too early. We do not plan price reduction, the price reduction is a natural sequence so when the exchange rates have gone down as we are expecting and it stabilizes for a longer period then you see that it trickles down on the prices, so it is not that when it goes up.”
“The market responds when it should respond,” he told Accra-based Joy FM on Tuesday, May 16.
Meanwhile, the Fund will on Thursday, May 18 give details on Ghana’s disbursements following a scheduled approval of the request for an extended credit facility by the country.
The approval will be done on Wednesday, May 17 by the Executive Board of the Fund.
In a media advisory on Wednesday, the IMF says a virtual press conference will be held on Thursday in Washington DC “to brief journalists on the outcomes of IMF Executive Board meeting on Ghana’s request for an Extended Credit Facility Arrangement, which will take place on Wednesday, May 17”.
Minister of Finance Kenneth Nana Yaw Kuntukunuku Ofori-Atta and Central Bank Governor Dr Ernest Kwamina Yedu Addison will join the IMF Mission Chief for Ghana, Stephane Roudet, for the press conference.
Senior Communications Officer for IMF Tatiana Mossot will coordinate the press conference.
Ghana is expected to receive a first tranche of $600 million within a week after the announcement.
The second tranche is expected to be in by December.
The country is seeking a total of $3 billion from the Bretton Woods institution.
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