IMF loan not enough to curb Ghana currency freefall
from MASAHUDU KUNATEH in Accra, Ghana
ACCRA, (CAJ News) – RENOWNED Ghana economist, Dr Raziel Obeng-Okon, said the $114 million the International Monetary Fund (IMF) advanced to Ghana to shore up Bank of Ghana’s reserves cannot stop the local currency’s decline overnight.
Obeng-Okon, a lecturer at the Ghana Institute of Management and Public Administration (GIMPA), said the amount was not enough to stabilise the depreciating cedi.
He gave the warning during an interview with Itnewsghana in his office in Accra.
“I do not think the IMF’s first tranche of $114 million would be enough to shore up our reserves. This represents less than13 percent of the total amount of $918 million expected in support of our medium term economic reform programme,” he said.
He however thinks the government should focus on the total inflows from the IMF and its attendant expected donor inflows of about $1,25 billion yielding total expected inflows of over $2,16 billion by the end of 2015.
The government recently announced that the IMF had finally approved a credit facility of $918 million, which will be released in tranches from 2015 to 2017 to help stabilise the Ghanaian economy.
The first tranche of $114 million last week hit the account of the Bank of Ghana to shore up its reserves.
Subsequently, there will be a review process of the first tranche normally within six months.
The cedi which traded GHC3,8236 to the US Dollar on Monday is yet to make a gain since the arrival of the IMF’s first tranche which some analysts and economists called “the IMF medicine.”
– CAJ News
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