Deputy Ranking Member of Parliament’s Finance Committee and Member of Parliament for Tano North, Dr Gideon Boako
Tano North MP Dr Gideon Boako has explained why the alleged $80 million monthly cap on the Bank of Ghana’s foreign exchange interventions under the previous IMF programme may not be explicitly found in published IMF reports.
According to Dr Boako, details concerning the intervention limit were market-sensitive and were therefore redacted from documents presented to the IMF Board.
In a Facebook post on Saturday, August 29, he said the absence of the figure from publicly available IMF reports should not be interpreted as evidence that no such agreement existed.
“As is standard practice in all IMF negotiations, information on intervention caps is market-sensitive,” Dr Boako stated.
He argued that publicly disclosing a limit on the central bank’s ability to intervene in the foreign exchange market could trigger speculative attacks against the cedi.
“If the market were to know that the central bank could not intervene beyond $80 million, it would create speculative attacks against the cedi,” he said.
Dr Boako maintained that the intervention cap was initially $80 million per month and was later reduced to $60 million, with the previous government adhering to the restrictions.
He also rejected the use of Ghana’s reported $3 billion in FX sales as evidence that the previous administration had exceeded the alleged intervention ceiling.
According to him, the $3 billion figure combines different BoG foreign exchange operations, including the FX auction and intervention budgets, with recent IMF reports also identifying an intermediation budget.
“FX Auction is pre-announced and rules-based. FX Intervention is discretionary and used to smooth volatility. They are not the same,” Dr Boako explained.
He said adding the various windows together produces the total FX sales figure, making it misleading to divide the $3 billion by 12 months and describe the resulting average as monthly intervention.
Dr Boako’s comments come amid a public debate over Dr Bawumia’s assertion that the previous government was constrained by an IMF-imposed limit on its foreign exchange interventions.
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