Kofi Pianim, Head of Global Markets at First National Bank, has expressed worries about Ghana’s currency market volatility and how it affects companies. He attributes the volatility to things like international investors pulling out of the country’s bond market.
Speaking on Graphic Business X Dialogue with the topic “2025 Budget: What’s in it for You and Your Business,” Mr. Pianim pointed out that although business planning has been challenging owing to the swift changes in currency rates, the situation has improved as a result of the Bank of Ghana’s proactive actions.
He gave the central bank credit for ensuring that players in the foreign exchange market offer real-time information on currency trading and for imposing more discipline and openness.
Therefore, it implies that you are consuming more reserves than you should be. The central bank has worked hard to enforce discipline, requiring market players to display their creation locations throughout the day so that they can respond promptly in the case of an occurrence,” he said.
He clarified that, in contrast to earlier times when reserves were needlessly drained, the Bank of Ghana now manages foreign currency reserves with a more strategic approach, guaranteeing prompt and efficient market interventions.
Mr. Pianim also emphasized outside forces that promote currency stability, such as the World Bank and IMF’s financial support. He emphasized that limitations on pension funds’ capacity to invest outside of the domestic market had contributed to a reduction in capital outflows, hence strengthening the cedi’s stability.
Furthermore, he praised the government’s gold-purchasing initiative, which has greatly increased foreign exchange reserves.
“Our gold-buying scheme has also involved the Ghanaian government or central bank. They were about 16 tons last year, and as of February, they are about 30.5 tons this year,” he disclosed.
According to Mr. Pianim, initiatives to widen the debt market to international investors and raise the yield curve might improve economic stability in the future. He thinks that by taking these steps, Ghana would be able to reorganize its debt profile and find more affordable funding options.
Nonetheless, he emphasized that preserving economic confidence would depend heavily on upholding budgetary restraint and making sure that market players are kept informed.
He is certain that Ghana is in a strong position to handle currency fluctuation and draw in more international investment in the upcoming years, despite current obstacles.