The Institute of Economic Affairs (IEA) has proposed several strategies to stabilise the depreciation of the cedi.
The proposed strategies were captured in a statement issued by the IEA on Monday, May 20, 2024.
It suggested to the government that it initiate these strategies today, along with others, to ensure maximum effectiveness.
It further advised the government to initiate discussions with the International Monetary Fund (IMF) and external creditors to expedite the external debt restructuring process.
This, it said, would enable the IMF to disburse the third tranche under the ECF programme.
The IEA posited that the disbursement from the IMF would trigger the release of funds from other development partners, such as the World Bank, African Development Bank, and bilateral creditors.
“Measures to address the incessant depreciation must aim at dealing with the underlying determinants of FX demand and supply. The measures must also have timelines, which we have conveniently categorised into the fire-fighting, short-term, medium-term and long-term phases. The measures for these phases are not necessarily to be undertaken sequentially.
“Indeed, many of them are required to begin today and to run simultaneously in order to achieve maximum impact. We decided to include this phase to answer the question often put to us as to what we can do immediately to stop the “bleeding” of the cedi. Obviously, the options here are limited.
“The immediate option we can think of is for the Government to engage with both the IMF and the external creditors to reach an early agreement on the external debt restructuring exercise. This would allow the IMF to release the third tranche under the ECF program.
“The IMF release, in turn, would unlock funds from other development partners, such as the World Bank, African Development Bank and bilateral creditors. Those funds would boost BoG’s reserves, allowing it to provide higher liquidity to the FX market to calm the current panicky and speculative situation.”
By: Rainbowradioonline.com/Ghana
