Business News of Thursday, 21 February 2019
Source: citinewsroom.com
2019-02-21
The local currency since January 2019 has witnessed some depreciation
The current free fall of the cedi against major trading currencies especially the dollar has nothing to do with Ghana’s economic fundamentals, according to Director of Treasury at the Bank of Ghana, Steven Opata.
Speaking on the Citi Breakfast show on Wednesday, Steven Opata said currently, the economic fundamentals are good and the central bank expects the cedi to bounce back sooner than later.
“If you look at the fiscal situation, it has improved significantly, if you look at the trade account, it’s been very solid. The current account has also been improving. The fundamentals are solid,” he told Bernard Avle on the Citi Breakfast Show.
There’s been widespread concern amongst the general public and the business community, about the recent depreciation of the Cedi and its impact on livelihoods.
The local currency since January 2019 has witnessed some depreciation, reducing in value against the dollar from 4 cedis 90 pesewas to 5 cedis and above in some quarters.
The decline in the value of the currency is beginning to have a negative impact on traders, particularly importers.
Critics have lashed out at the Vice President, Dr. Mahamudu Bawumia, for not being able to save the cedi from free fall especially when he said a New Patriotic Party government will turn such a situation around.
Mr. Opata on the Citi Breakfast Show gave a number of reasons he believed are adversely affecting the performance of the cedi.
He was however hopeful that with measures put in place by the central bank and government, the cedi will surely recover.
“The exchange rate we run in Ghana is a flexible exchange rate regime. The focus should not be on targeting a number because if you do that you may not be getting the whole picture. What are not targeting 5, 6, neither are we targeting 4. What we are looking at is that the currency should not be volatile,” he added.
Bawumia’s spokesperson speaks
Dr. Bawumia’s Economic adviser and spokesperson, Dr Gideon Boako who also spoke on the Citi Breakfast Show corroborated Opata’s assertions.
“Given that we have opted for a regime of flexibility, we will see some level of depreciation. What we want is to bring some level of stability to slow the depreciation rate…I’m not saying that at GHc5 to the dollar, market players won’t lose money but with a stable rate of 3% instead of an uncertain rate, people can then plan,” he added
