This means the BoG is willing and able to intervene on the forex market again to defend the cedi against any untoward depreciation – translate as depreciation caused primarily by speculation by investors and currency traders, rather than by faltering actual macroeconomic performance – through 2020. Consequently, the BoG is confident that any intervention on its part to defend the cedi would only be required up to August or September, upon which it could replace any draw downs of Ghana’s international reserves. Encouragingly though, in direct contrast to the situation a year ago, the BoG is not being required to defend the cedi through local forex market interventions. A year ago, it cost the BoG some US$600 million from Ghana’s international reserves to intervene and this only slowed the cedi’s depreciation during months of crisis. This means it is unlikely that the BoG will need to intervene substantially this year – but if it does it will do so decisively.

Source: GhanaWeb February 03, 2020 11:37 UTC