Ghana receives US$750m Loan From Afrexim Bank
The $750 million African Export-Import Bank (Afreximbank) Loan has finally hit the Bank of Ghana’s (BoG) Account. Government is expected to use the money to finance some infrastructure projects. However, the Bank of Ghana will take the dollars and give the cedi equivalent to government as part of measures put in place to shore up foreign reserves.
The facility forms part of the US$2 billion loan government indicated recently it was arranging from different sources to help check the free fall of the local currency.
Sources close to the Ministry of Finance revealed that the US$750 million arrived in three tranches of US$332 million, US$187 million and 193 million euros; all of which have been deposited with the Central Bank’s reserves.
This week the cedi traded at a fresh low of 9.89 from 9.38. A recent survey by Bloomberg on the performance of the currencies of some 150 economies tracked indicated that the cedi has fallen by at least 35 per cent in 2022, coming after Sri Lanka’s rupee.
To shore up reserves, government is expecting the cocoa syndicated loan of US$1.3 billion.
Experts believe that these measures will give the cedi some stability in the short term but that will not be enough as they have called for more sustainable measures in the medium to long term.
According to AZA Finance in its latest update, the cedi depreciation will continue in the short term, though the pace of losses may slow given the liquidity tightness created by the bumper rate hike.”