Professor Godfred Bokpin, an Economist and Professor of Finance at the University of Ghana has stated Stabilizing the cedi at GH₵10–12 right approach.
The economist asserted that the cedi between GH₵10 and GH₵12 is the right path for Ghana’s economy.
According to Prof Bokpin, the Bank of Ghana had been aiming to manage the exchange rate.
Speaking on JOY FM’s morning show, Godfred Bokpin explained, “I have indicated much earlier that the central bank was targeting the exchange rate. They didn’t want to communicate that to the market at the initial stage, so it was not just a more recent meeting where they decided on it. They knew largely where they were heading to.
“That is why we said that what we witnessed in terms of the strengthening of the local currency was not just the forces of demand and supply. There were some interventions to cause the strengthening,” he said.
He added, “We were confirmed that the rate of facilitation was too aggressive to enable planning and the entire economy to adjust to the strengthening of the currency. And to that extent, you could not describe that as stability. That was more of a disruption. The disruption could cause negative or positive effects, and it was very difficult for people to play along or even plan. It was quite unsettling,”
“It’s also good that there’s now some level of clarity that yes, we need to stabilise beyond the aggressive strengthening. We need to stabilise it. Stability is preferred over swings whether appreciation or depreciation. It’s neither good for businesses nor for central banking in the first place,” he said.
Prof Bokpin asserted, “Of course, we also do know that stability in economics is not the same as the same price or fixed price over time. We still expect that there will be some kind of variation in the rate, but it should not be significant enough to cause disruptions or uncertainty when it comes to planning”.
In a related story, President John Dramani Mahama has stated that the cedi at GHS 4 to $1 is unrealistic.
John Mahama noted that projections suggesting the cedi could strengthen to GHS 4 to the dollar are unrealistic.
According to John Mahama, he and the BoG Governor and the Finance Minister met and discussed the cedi and they think the real value of the cedi is anywhere between 10 and 12.
John Mahama noted that the cedi has stabilized at that level, emphasizing the need for a fair balance in achieving the currency’s actual worth.
He added that the exchange rate between GHS 10 and GHS 12 to the dollar range better supports Ghana’s exporters.
