Ghana’s Forex Reserves, Cedi Stability Poised for Major Boost as IMF Board Considers Fourth Review Today

Ghana is poised for another critical financial breakthrough today as the Executive Board of the International Monetary Fund (IMF) meets in Washington, D.C., to consider, and if possible, approve the country’s fourth review under the $3 billion Extended Credit Facility (ECF) programme.

A successful outcome from today’s Executive Board meeting could unlock the disbursement of $370 million for Ghana.

This possible move could provide a timely injection into Ghana’s foreign exchange reserves and offer much-needed support for the stability of the cedi.

After the staff level approval for the fourth review of the programme was reached, all the necessary documentation has been submitted, waiting for today, when the big and far-reaching decision will be made by the Executive Board of the fund.

Following the staff-level approval, some analysts are optimistic that the country has met nearly all the required conditions to pass the board’s review. This paves the way for a swift Board decision and immediate financial relief.

If the review is approved today as anticipated, the funds could hit the Bank of Ghana’s account as early as Thursday, July 11, bringing total disbursements from the IMF under the ECF programme to more than $2.3 billion since Ghana entered the deal in May 2023.

Analysts say the impending disbursement comes at a crucial time, as the Bank of Ghana continues efforts to stabilise the cedi amidst external pressures and post-COVID fiscal challenges.

This injection of $370 million will directly improve Ghana’s gross international reserves, giving the central bank greater muscle to support the cedi and manage currency volatility.

In addition to the IMF support, another $360 million is expected from the World Bank by the end of July, further reinforcing Ghana’s external buffers.

An approval today will also send a broader message to investors and the global financial community that Ghana is sticking to its reform path. This will be a strong message as the anticipated approval today would mark the fourth consecutive successful review since the programme began, enhancing Ghana’s credibility and paving the way for potential re-entry into both domestic and international capital markets.

Should all go according to plan, Ghana’s strengthened reserve position could ease demand pressures on the dollar market and improve the central bank’s ability to respond to shocks, ultimately helping to tame inflation and restore macroeconomic confidence.

Ghana’s economic managers have their eyes fixed on Washington today. The stakes are high, and so is the potential upside. Today’s approval will mean more than just an approval, but an opportunity for the country to strengthen its recovery effort.

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