The Head of the Finance Department of the University of Ghana Business School is warning that any delay in finalizing a bailout program with the International Monetary Fund (IMF) could result in the depreciation of the cedi.
According to Dr. Godfred Bokpin, the financial assistance the program comes with, can help close existing gaps in the 2015 budget to stabilize the cedi.
The cedi has enjoyed relative stability since the last quarter of 2014, after depreciating in excess of 30% against major trading currencies in the first three quarters of that year.
President Mahama has assured that a program with the IMF will be finalized before close of next month after several failed timelines in the past.
Speaking to Citi Business News Dr. Godfred Bokpin was optimistic a deal will soon be finalized because of the negative implications if Ghana fails.
“The decision to go to the IMF paid off even in the foreign exchange market and with the issuance of the Eurobond, now we have to work to ensure that the deal is agreed and that implementation has started…otherwise if we don’t work so hard to finalize the program we will see some level of pressure being brought on our currency (Cedi)”, he stressed.
Ghana started talks with the IMF in September 2014 for a bailout program, following challenges with its economy.
Head of Standard Chartered Bank’s Africa research Razia Khan has predicted the cedi will depreciate to 4 cedis 20 pesewas against the US dollars before close of year.
But the prediction will be revised if Ghana secures a program with the IMF.
The IMF recently described as good progress efforts to clean up Ghana’s payroll before a bailout program is finalized.
citifmonline.com
