Dr Ernest Addison, Governor of the Bank of Ghana, Monday said, several factors account for the depreciation of the local currency.
He, therefore, attributed the depreciation of the local currency to the day-to-day pressures on the economy.
Although the cedi appreciated against the dollar during the last two months of 2022, it is currently depreciating further against the dollar.
The cedi which appreciated GH¢8 to a dollar around December 2022 is currently selling GH¢13 to a dollar.
Dr Addison explained when he appeared at the Public Accounts Committee (PAC) of Parliament that the cedi depreciation reflected the movement daily.
He said: “If there is additional demand for the cedis the currency will be restricted. The Central Bank cannot fix the exchange rate, it depends on what transactions have taken place…like payments to contractors.”
“Typically, that kind of payment can move the exchange rate because some of them immediately convert into foreign exchange. So, the exchange reflects a lot of day-to-day pressures in the economy,” he said.
Touching on the Gold for Oil policy introduced by the Government, Dr Addison said it would help avoid the pressure on the exchange rate from the private Oil Marketing firms.
Ghana on Monday, January 16, 2023, took delivery of the first consignment of the Gold for Oil deal reached with the United Arab Emirates.
While some members of the PAC expressed worry at the policy’s sustainability, Dr Addison urged them to be hopeful as “it is early days yet to conclude.”
The 40,000 metric tons of oil arrived at the Tema port on Sunday, January 15, 2023, according to the Ministry of Lands and Natural Resources.
The Energy Ministry, the Bulk Oil Storage, Transportation, and Oil Marketing Companies are to formulate plans for its distribution and sale.
PAC commenced sittings on Monday, January 16, 2023, to examine the Auditor General’s report on public accounts of the government for the year 2020.
As part of their scheduled work, the Committee would also scrutinise the Auditor General’s report on public accounts of various Ministries, Departments, and Agencies during the sittings.
Further, the accounts of public boards, corporations, and other statutory institutions for the year 2020 would also be considered.
Proceedings of the almost two-week Sitting are expected to be concluded on Friday, January 27, 2023, according to a statement issued by the Public Affairs Directorate of Parliament and copied to the Ghana News Agency in Accra.