Cedi Challenges: Bawumia Suggests Linking Local Currency To Gold To Ensure Stability

• Vice President Dr Mahamudu Bawumia has hinted at a plan to link the value of the Cedi to gold
• This will be part of efforts to cushion the local currency against forex challenges from depreciation
• Bawumia was speaking at the inauguration of the Royal Ghana Gold Refinery in Accra on Thursday

Vice President Dr Mahamudu Bawumia has suggested a plan to anchor the value of the Cedi to gold.

This will be part of efforts to cushion the local currency against forex challenges from depreciation.

This follows the domestic gold purchase programme, under which the Bank of Ghana has acquired 65.4 tons of gold valued at US$5 billion.

Bawumia's comments came at the inauguration of the Royal Ghana Gold Refinery in Accra on August 9.

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“I want us to move our foreign exchange management because we need an anchor, and I believe that the best anchor for the Cedi is gold."

Bawumia explained that if you have GH¢3 billion and you are looking to buy forex, the Bank of Ghana can take the GH¢3 billion, buy gold, and give you your forex.

Ghana's forex challenges

Ghana's forex struggles have intensified over the last two years due to the economic crisis.

The cedi has depreciated by over 19.6 percent against the dollar as of July 2024.

It began the year trading at GH¢11.97 to a dollar on the interbank market and GH¢12.33 on the retail market but is currently over GH¢15.

This prompted calls for action from the state by business groups like the Ghana Federation of Traders.

Businesses have complained that the depreciation has been killing their businesses.

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Federation of Traders backs BoG’s directives on forex sector

YEN.com.gh reported that the Ghana Federation of Traders has backed the setting up of a centralised foreign exchange trading platform by the central bank.

The Federation’s Deputy Communications Director told YEN.com.gh he was hopeful of a positive impact on forex business.

The Bank of Ghana directed all foreign exchange bureaus to check for the Ghana Card before transactions, among other things.

Proofread by Berlinda Entsie, journalist and copy editor at YEN.com.gh

Source: YEN.com.gh