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BoG is not injecting dollars into economy- Director of Research

BY: Mabel Faith Tannor
The Director of Research at the Bank of Ghana, Mr Philip Abradu-Otoo
The Director of Research at the Bank of Ghana, Mr Philip Abradu-Otoo

The Director of Research at the Bank of Ghana, Mr Philip Abradu-Otoo has debunked reports that the central bank was injecting dollars into Ghana's economy to help stabilize the cedi.

He said though the central bank supplies dollars to support trading actives through its balance of payment, it makes a minimal intervention in injecting dollars to halt the cedi depreciation.

In a radio interview with Accra based Star FM on Wednesday, he said the Bank of Ghana supports the smooth running of the economy, and only intervenes minimally when the exchange rate exceeds to a certain level.

“So, on one side, while we are helping support BoG to ensure that the economy continues to run smoothly, on the other side we also do intervene but very minimally. And it brings us to the point where... there is a certain exchange rate level, and when the central bank sees that the exchange rate has gone past a certain level which is constituent with the fundamentals, it steps in minimally to try to correct those fluctuations,” he said.

“About loss in reserve and what we do, we are supporting the balance of payment, we are supporting trade and that is normal. Every central bank does that to ensure that the economy runs,” he said.

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There has been reports that the Bank of Ghana injected some $800 million to help halt the 8 per cent depreciation of the Cedi.  This caused the cedi to hit 5.8 pesewas. But these reports were debunked by Vice president Dr Mahamudu Bawumia.