Ken Ofori-Atta
GOVERNMENT’S HOPES of receiving a loan of US$750 million from Afrexim Bank to shore up the country’s foreign exchange reserves has at last materialised.
The facility forms part of the US$2 billion loan government indicated recently it was arranging from different sources to help check the free fall of the local currency.
Information gleaned from sources within the Ministry of Finance revealed that the US$750 million arrived in three tranches of US$332 million, US$187 million and 193 million euros; all of which have been deposited with the Central Bank’s reserves.
Furthermore, it said government was expecting the cocoa syndicated loan of US$1.3 billion expected to beef up efforts at propping the country’s foreign reserves.
A recent survey by Bloomberg on the performance of the currencies of some 150 economies tracked indicated that the cedi has fallen by at least 35 per cent in 2022, coming after Sri Lanka’s rupee.
The cedi slumped against the dollar again this week, trading at a fresh low of 9.89 from 9.38. The development jacked up yields on local bonds to an average of 34%, according to Bloomberg, the highest among its emerging market peers.
Demand for dollars outstripped supply by US$84.5 million at the Bank of Ghana’s most recent forward FX auction, with sales limited to US$25 million.
According to AZA Finance in its latest update, “We expect the cedi depreciation to continue in the short term, though the pace of losses may slow given the liquidity tightness created by the bumper rate hike.”
It would be recalled that Information Minister, Kojo Oppong Nkrumah, this week gave assurance in a media interview with Citi FM that the free fall of the cedi would stabilise soon.
“…The US$750 million that we were expecting, all the paperwork has been concluded, and it should be hitting our accounts today or tomorrow.
“If I were you, and I was holding onto dollars, I would be selling it by now because there is a lot more dollar coming in from the US$750 million and also from the Cocoa Syndicated Loan of about US$1.3 billion,” the minister said.
He said government expected such measures it was taking to lead to a quick stabilisation, among others.
BY Ernest Kofi Adu