Senior Research fellow at the Institute of Fiscal studies, Dr. Seade Boakye has said the rate of the cedi’s depreciation is much better as a result of some government actions, describing the current free fall of the cedi as normal.
According to Dr. Boakye, there is too much political talk around the fall of the cedi, which is making the recent depreciation look like something unusual.
“The strength of the cedi is very down but not too down, it is important to note that, the cedi as compared to the dollar has not depreciated that much. There is too much talk around the depreciation subject making it look alarming and I don’t think there is the need for any discussions like that” he told Kweku Owusu Adjei on Anopa kasapa.
He added that, “historically, the rate of the depreciation in others times is lower than what it used to be, this time we can say the fall is normal.”
Rather, he has blamed the rate of the depreciation on the Bank of Ghana (BoG), who he says have failed to take action by instituting some measures to ensure the stability of the struggling cedi.
He said typically, the BoG has enough reserves they can use to support the cedi from falling.
“Bank of Ghana has enough resource furnish the cedi but they have relaxed. So it is Bank of Ghana that has relaxed which is why we are seeing the cedi fall. They have so much reserve, they have about 7 billion of foreign reserve which they can use to support the cedi to keep it from falling” he stated.
Meanwhile Spokesperson for the Vice President, Gideon Boako has said that unlike in the case of the NDC administration at the time, the NPP’s economic fundamentals remain strong considering the rate of the cedi’s depreciation vis-a-vis the rate of inflation.
“If your rate of depreciation is higher than your rate of inflation, it means your fundamentals are absolutely weak. If you are able to achieve a rate of depreciation that is lower than your inflation, then it means your fundamentals are supporting. As at the time, we were having inflation rate less than 30%, and still we were depreciating by 31%. You can’t have a strong fundamental and at the same time, have an exchange rate depreciation that’s higher than your rate of inflation.”
By: Kasapafmonline.com/Alex Semordzi