Government of Ghana set 40 member committee to check and 'arrest' the free fall of the cedi against major foreign currencies

Ghana’s Ministry of Finance has inaugurated a committee which will deal with foreign exchange (FX) volatilities and its impact on the economy.

Government of Ghana set committee to check the free fall of the cedi against major foreign currencies

This means that the committee will investigate the cause of the free fall of the cedi against the major trading currencies, especially the dollar.

The committee, chaired by the Minister of Finance, Mr Ken Ofori-Atta, has members drawn from all stakeholders of the forex market, including banks, manufacturers, importers, and the Bank of Ghana.

The Deputy Minister of Finance, Mr Charles Adu Boahen while inaugurating the committee said the FX Development Committee is mandated to review the current FX regime, identify the current constraints in the systems and offer workable alternative by way of policies and programmes which would potentially reduce FX risks in the economy.

He said the committee will also look at the role of automation and digitisation as a critical enabler for FX reforms.

“The formation of this committee is not to infringe on the independence of the central bank in its foreign exchange operations,” he said, adding that the work of the committee is to complement the efforts of the central bank in curtailing the usual poor performance of the cedi against its foreign counterparts.

Mr Adu Boahen said FX volatilities remained a major concern for the government as it impacted real output growth and also increased price inflation.

He attributed the seasonal fall in the value of the cedi to external headwinds and cyclical demands for forex by corporate and individuals for trade settlements in recent times, increased demand by the energy sector actors and currency market speculations.

Given the impact of the cedi depreciation on the economy, he said the government established the foreign exchange development committee to offer policy alternatives to address the challenge.

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