Bank of Ghana pumped US$1bn to support cedi in 2019 - Isaac Adongo

The Member of Parliament (MP) for Bolgatanga Central, Mr Isaac Adongo has asserted that the Bank of Ghana (BoG) used about $1 billion of the country's reserves to support the cedi in the first three months of the year.

According to him, data from the central bank indicated that $700 million was used between January and February with an additional $300 million added in March.

His assertion comes on the back of Vice President Mahamoud Bawumia’s refutation at Wednesday’s Economic Management Team’s Town Hall Meeting that the BoG used about $800 million to shore up the economy to save the cedi.

According to the Vice President, the recent fall in the cedi was as a result of some directives from the International Monetary Fund (IMF) to the Bank of Ghana (BoG).

He said at the end of January 2019 as part of the seven prior actions to get to the IMF board and the completion of the IMF programme, the Bretton Woods Institution gave Ghana seven actions to complete before March 15.

Read: IMF's directives caused cedi fall – Bawumia

But responding to Dr Bawumia’s statements, Mr Adongo, who is a member of the Finance Committee of Parliament, described the Vice President’s statement as dishonest.

He said, "Data released by the BoG last week indicated that Ghana’s net international reserves at the end of 2018 was $3.8 billion which declined to about $3.1 billion by the end of February 2019. This means that the BoG had pumped $700m of our hard-earned net international reserves to stabilise the cedi," he said.

He said although the action was to stabilise the cedi and give the government a positive outlook, "the cedi immediately faced a major attack and ended trading at GH₵5.6 to the $1 per Bloomberg report."

He said Bloomberg Terminal, which tracks the performance of currencies worldwide currently has the cedi as the worst performing currency in Africa and fourth worst in the world.

Mr Adongo added that some $1.4 billion of reserves were used to support the cedi between 2017 and February this year, describing the action as a reckless use of the country's reserves.