Posted: Thursday 21st August 2014 at 23:36 pm

Bawumia’s claims of non-credible exchange rate misleading – Currency Analyst

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Currency Analyst with the Gold Coast Security, Samuel Ampah has expressed surprise at Dr Mahamudu Bawumia’s assertions that Ghana’s inflation and exchange rate figures are not credible.

According to him, the methodology used in calculating the figures by the Bank of Ghana when Dr. Bawumia was a Deputy Governor has not changed and therefore disagreed with the claims.

Speaking to Joy News Thursday evening, Mr. Ampah said “maybe I would want to find out from Dr. Bawumia if the methodology that was used when he was at the Bank of Ghana as the Deputy Governor has changed; because I believe that it’s the same method that was used when he was there, to calculate the rate of depreciation that the Governor or the Central Bank is using at the moment.”

He added that ever since the value of the currency was measured in terms of depreciation, “there is no model of which is being applied by either Bloomberg, Reuters or Gold Coast fund management that corresponds to that of the Central Bank.”

The New Patriotic Party’s two-time Vice-Presidential candidate Dr. Bawumia had questioned the credibility of the country’s inflation and exchange rate figures on his Facebook wall [www.facebook.com/MBawumia] Thursday.

In that post he pointed out: “An examination of recent data on inflation released by the Ghana Statistical Service as well as exchange rate data reported by the Bank of Ghana raises serious concerns.”

The BoG, he said “would have us believe that since June 17 this year, the exchange rate of the cedi to the US dollar has remained unchanged at some GHC 3.02 per US dollar,” and has thus “remained fixed at this rate over the last three months.”

Dr. Bawumia said “A simple look at the interbank market exchange rates indicates that the cedi has not only been depreciating daily, but is currently trading between GHC3.7 and GHC 4.1 per dollar with an average of some GHC3.8 per US dollar.”

TABLE 1. BANKS QUOTED US$ SELLING RATES as at 13/08/2014 

 AGRIC DEVELOPMENT BANK………………………………………3.9300
 CAL Bank………………………………………………………………..3.7990
 ECOBANK……………………………………………………………….3.6200
 PRUDENTIAL BANK……………………………………………………3.8500
 ACCESS……………………………………………………………………….3.7400

 HFC BANK…………………………………………………………………….3.7400

 ROYAL BANK…………………………………………………………………4.0500

 UBA………………………………………………………………………………4.1000

 STANDCHART…………………………………………………………………3.6500

 BARCLAYS…………………………………………………………………….3.7500

 GCB…………………………………………………..…………………….  3.7000

 SGS………………………………………………………………………………3.8500

 UNIBANK………………………………………………………………………..3.8500 

Table 1 above shows US $ quotations from a sample of 13 Banks on 13th August 2014.

The story is not much different at the forex bureaux or the black market.

“So why in the face of all this evidence is the Bank of Ghana insisting that the exchange rate is some GHC3.03 to the dollar. Can anyone in Ghana today look you in the eye and tell you the cedi exchange rate has been unchanged in the last three months?” Dr. Bawumia asked.

But Samuel Ampah argued that while Dr Bawumia’s claims of exchange rate depreciation as well as inflation may be true, the methodology that was used during his reign as deputy governor in calculating inflation was the same being used now.

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