Seth Terkper, Finance Minister
Benjamin Amoah, Head of Financial Stability at the Bank of Ghana (BoG), has advised government to strictly adhere to budgetary targets to minimize budget deficits and foster the stability of the Cedi.
He said government must also improve revenue mobilization by widening the tax base, diversify exports and make efforts to block foreign exchange leakages.
Amoah, who was speaking at a seminar by the Institute of Economic Affairs (IEA) in Accra said, ‘There is also the need for greater co-ordination, collaboration, communication and co-operation between the fiscal managers and the Bank of Ghana.
‘This is because, high fiscal and current account deficits, are usually associated with significant exchange rate depreciation.
He said, ‘As we work towards changing the structure of the economy, there is also the need to bring our fiscal and current account deficits to sustainable levels to ensure sustainable stability of the Cedi.’
Amoah said there has been slowdown in the depreciation of the Cedi since the introduction of the new measures by BoG to address the problems.
In addition to the slowdown in the pace of the depreciation, he said the market has also witnessed a decline in the volatility of the Cedi to the US Dollar.
According to him, the cumulative depreciation of the Cedi against the dollar, which was 7.2 per cent from the beginning of January this year, has been reduced to 1.29 per cent as at April 9.
The BoG introduced measures at the beginning of the year to halt the depreciation of the Cedi against major foreign currencies.
By Cephas Larbi
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