The IEA mentioned that many of these strategies need to be implemented starting from Monday, May 20, and others should be executed concurrently to ensure maximum effectiveness.

The IEA emphasised that these strategies should focus on addressing the fundamental factors influencing the demand and supply of forex.

In a press statement issued on Monday, May 20, the IEA advised the government to initiate discussions with the International Monetary Fund (IMF) and external creditors to expedite the external debt restructuring process.

The IEA is of the opinion that this would enable the IMF to disburse the third tranche under the ECF programme.

It emphasised that the disbursement from the IMF would trigger the release of funds from other development partners, such as the World Bank, African Development Bank, and bilateral creditors.

The IEA firmly believes that these funds would augment the reserves of the Bank of Ghana, enabling it to inject more liquidity into the forex market to alleviate the current panic and speculative situation.

“Measures to address the incessant depreciation must aim at dealing with the underlying determinants of FX demand and supply. The measures must also have timelines, which we have conveniently categorised into the fire-fighting, short-term, medium-term and long-term phases. The measures for these phases are not necessarily to be undertaken sequentially.

“Indeed, many of them are required to begin today and to run simultaneously in order to achieve maximum impact. We decided to include this phase to answer the question often put to us as to what we can do immediately to stop the “bleeding” of the cedi. Obviously, the options here are limited.

“The immediate option we can think of is for the Government to engage with both the IMF and the external creditors to reach an early agreement on the external debt restructuring exercise. This would allow the IMF to release the third tranche under the ECF program.

“The IMF release, in turn, would unlock funds from other development partners, such as the World Bank, African Development Bank and bilateral creditors. Those funds would boost BoG’s reserves, allowing it to provide higher liquidity to the FX market to calm the current panicky and speculative situation.”