Stronger Reserves to Boost Cedi Stability and Disposable Incomes, Merban Capital-GHANA

Ghana’s strengthened international reserves are expected to enhance currency stability and improve citizens’ purchasing power, according to Merban Capital’s Head of Finance, Nelson Cudjoe Kuagbedzi. He stated that the improved reserve position will play a key role in stabilizing prices and supporting economic growth by strengthening the cedi against foreign currencies.

President John Dramani Mahama recently disclosed that Ghana’s reserve cover rose from 4.7 months in April to six months, a level not seen in the last 15 years. This positive development indicates progress in the country’s macroeconomic management and could help ease inflationary pressures.

Speaking with Citi Business News, Kuagbedzi emphasized the importance of maintaining this momentum. He explained that a stable currency has far-reaching benefits for the economy, particularly for households. Increased currency stability directly influences purchasing power, which in turn improves individual disposable incomes.

He noted that the current level of reserves is the result of consistent efforts over time. As of December, Ghana had over 8 billion cedis in reserves, covering around three months of imports. The current doubling of the import cover to six months represents a significant achievement and a stronger buffer against external shocks.

Kuagbedzi concluded by urging the government to continue building on this progress. He warned that sustaining economic stability will depend on policy consistency and prudent fiscal management to ensure the gains in reserves and currency strength benefit all sectors of the economy.

Source: Citi newsroom