President John Dramani Mahama addressed concerns regarding the Ghanaian cedi’s recent fluctuations, expressing confidence in its future stability. He acknowledged the significant depreciation the currency experienced in the first half of 2024, losing nearly 25% of its value, which necessitated substantial intervention from the Bank of Ghana (BoG). However, he emphasized that the central bank has since reduced its interventions as the cedi demonstrates signs of self-correction. President Mahama believes the current fluctuations are part of a natural market adjustment rather than an indicator of renewed instability. He reassured stakeholders that the government is committed to maintaining a stable exchange rate environment to facilitate planning and investment.
The President’s confidence stems from the government’s focus on fiscal discipline, prudent expenditure management, and strengthening macroeconomic fundamentals. These measures aim to anchor stability in the currency market and prevent a recurrence of the sharp depreciation witnessed earlier. He expressed optimism that the cedi will settle at a stable rate and projected any future depreciation to remain within a manageable margin of approximately 5% per annum. This predictable and controlled depreciation rate will provide businesses and investors with the certainty needed to make informed decisions and contribute to economic growth.
The cedi’s sharp rebound earlier in the year instilled confidence in the market, but its recent slowdown has raised concerns of a potential reversal. President Mahama sought to allay these fears, emphasizing that the government’s current policies are designed to ensure stability and predictability in the currency market. The commitment to fiscal discipline signals a long-term strategy to maintain a sustainable exchange rate. By controlling government spending and maintaining sound economic policies, the aim is to create a stable macroeconomic environment conducive to currency stability and economic growth.
The President’s assurance comes at a crucial time when businesses and investors seek clarity regarding the cedi’s trajectory. His statements are intended to instill confidence that the government is actively managing the exchange rate and has implemented measures to prevent drastic fluctuations. The emphasis on a predictable and controlled depreciation rate of around 5% annually is designed to provide a stable framework for businesses to plan their operations and investments. This predictability reduces the risk associated with currency fluctuations, fostering a more attractive environment for both domestic and foreign investment.
The focus on macroeconomic fundamentals is key to the government’s strategy for achieving currency stability. By strengthening the overall economic framework, the cedi becomes less susceptible to external shocks and speculative pressures. Sound fiscal policies, coupled with prudent expenditure management, create a more resilient economy that can weather market fluctuations. This strengthens the cedi’s underlying value and contributes to its long-term stability. The government’s proactive approach to managing the exchange rate is essential for maintaining investor confidence and fostering economic growth.
In summary, President Mahama’s address aimed to reassure stakeholders about the cedi’s stability, emphasizing the government’s commitment to fiscal discipline and sound macroeconomic management. He acknowledged the earlier depreciation but highlighted the cedi’s subsequent recovery and the central bank’s reduced intervention. Projecting a controlled depreciation rate of around 5% annually, he stressed the importance of predictability for business planning and investment. The government’s focus on strengthening macroeconomic fundamentals and maintaining fiscal discipline underscores its commitment to long-term currency stability and sustainable economic growth. This proactive approach is crucial for building investor confidence and fostering a stable economic environment for businesses to thrive.
