The First Deputy Governor of the Bank of Ghana (BoG), Dr. Mumuni Zakaria, says the central bank is not using its reserves to hold up the cedi. He explained that the recent strength of the cedi is real and not fake. “If we were using our reserves heavily, we wouldn’t be building them up so fast,” he said. Dr. Zakaria added that the rise in the cedi is based on real trust in the market. “This is not fake confidence. If it was, smart traders would have noticed. The cedi would have quickly dropped again,” he said.
He also said the BoG is adding to its reserves faster than expected. “We are even building reserves much faster than people thought,” he said. “That’s why the market believes this strength in the cedi can last.”
Dr. Zakaria stressed that the reserves are of high quality. “These are not from loans,” he said. “They are from real gains. As of the end of April, we had over $10 billion in reserves. By June, we expect to reach $11 billion.” He said these numbers are better than what the IMF asked for. “The IMF wants us to have three months of import cover. Right now, we are at 3.7 months,” he explained.