BoG’s ‘knee jerk’ measures will drive people away from banks- Akoto Osei

Source: Ghana||Nathan Gadugah
Date: 06-02-2014 Time: 07:02:37:pm

The Minority Spokesperson on Finance Dr Anthony Akoto Osei has expressed disappointment with measures taken by the Bank of Ghana to arrest the continued depreciation of the country’s currency-cedi.

The Old Tafo Member of Parliament says the measures were “knee jerk” and would rather compel people who hitherto saved at the bank to take their money away from the bank.

The regulator on Wednesday announced far reaching measures in an attempt to stabilize the country’s sinking currency.

“Cash withdrawals over the counter from FEA [Foreign Exchange Accounts] and FCA [Foreign Currency Accounts] shall only be permitted for travel purposes outside Ghana and shall not exceed US$10,000.00 or its equivalent in convertible foreign currency, per person, per travel.

“Foreign exchange purchased for the settlement of import bills shall be credited to a margin account which shall be operated and managed by the bank on behalf of the importer for a period not exceeding 30 days,” the Central Bank stated in a public notice.

The measures have been met with severe criticisms especially by some importers and exporters who claim they will be worse off under what they claim is pernicious directive by the regulator.

Hours after the measures were announced, Joy News can confirm businesses, especially those in the hospitality industry are already breaking the law.

Some are still transacting businesses in dollars in clear breach of the directives by the Bank of Ghana.

Speaking to Joy News, Dr Anthony Akoto Osei said if the managers of the country’s economy had been guided by the lessons of history, they would have taken better options other than to seek to control the market.

According to him, only 20 per cent of the country’s population are in the formal sector and transacting business with the banks and other financial institutions.

The new measures, he warned, would rather take the few people away from the banks because people will not be dictated to as to how they have to use their own monies.

Instead of controlling people on how much monies they can withdraw in dollars, as the new Bank of Ghana measures clearly spells out, Dr Osei said the officials of the Bank of Ghana should rather provide incentives for people from whom they want to buy the dollars from.

He however applauded the government for raising the policy rate, a move he said would make the cedi more attractive.