Currency analyst, Derick Mensah, is confident inflows from the cocoa loan syndication would help stabilize the Ghana cedi currency.
His prediction is coming on the back of an initial agreement Monday between COCOBOD and some banks in Paris for the release of 1.8 billion dollars to buy the cash crop from farmers.
Governor of the Bank of Ghana, Dr. Kofi Wampah, had earlier projected that such inflows would shore up the central bank reserves and indirectly lead to the cedi’s stability.
Although some economists have cast doubts about the Governor’s projections – saying the funds will be used immediately to buy cocoa – Financial Analyst, Derick Mensah believes Dr Wampah’s projects are not farfetched.
He explains that when the Paris lenders give COCOBOD the $1.8 billion, the cocoa buyer will eventually lodge it with the Bank of Ghana in exchange for cedis which will shore up the central bank’s forex supplies.
“So when that money hits the account, the central bank then forwards cedi equivalent to engage in COCOBOD activities. It is the exchange [dollor to cedi] that will be positive for the larger economy,” he said.
The 1.8 billion Ghana cedis is expected to hit the accounts of Bank of Ghana possibly in the first week of October according the manager in charge of public affairs at COCOBOD, Noah Amenya.
COCOBOD is expected to pay about 2 percent as interest on the loan facility.