{"id":1182075,"date":"2022-08-17T23:20:26","date_gmt":"2022-08-17T23:20:26","guid":{"rendered":"https:\/\/www.ghanamma.com\/2022\/08\/17\/it-does-not-make-sense-any-longer-to-buy-treasury-bills-prof-lord-mensah\/"},"modified":"2022-08-17T23:20:26","modified_gmt":"2022-08-17T23:20:26","slug":"it-does-not-make-sense-any-longer-to-buy-treasury-bills-prof-lord-mensah","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2022\/08\/17\/it-does-not-make-sense-any-longer-to-buy-treasury-bills-prof-lord-mensah\/","title":{"rendered":"It does not make sense any longer to buy treasury bills &#8211; Prof Lord Mensah"},"content":{"rendered":"<p><\/p>\n<div id=\"article-text\" style=\"line-height: 2; letter-spacing: -0.5px;font-size: 18px;\">\n<p>                        <!--p class=\"ky_saved_articles_link\"><span class=\"ky_saved_articles_hide\"><img decoding=\"async\" src=\"\" class=\"ky_saved_articles_img\" alt=\"It does not make sense any longer to buy treasury bills - Prof Lord Mensah\" title=\"It does not make sense any longer to buy treasury bills - Prof Lord Mensah\"><\/span> Bookmark<\/p-->\n<p>Economist at the University of Ghana Business School, Prof Lord Mensah, says it does not make sense any longer for investors to buy treasury bills.<\/p>\n<p>According to him, Ghana has gotten to a point where \u201cthe Cedi deteriorates against the Dollar where people start seeing the Dollar as a store of value.\u201d<\/p>\n<p>Speaking in an interview on <strong>JoyNew\u2019s PM Express<\/strong> on Wednesday, he explained the reason for his assertion.<\/p>\n<p>\u201cIf you take our interest rate structures, you will realise that none of them goes above inflation, so effectively the real rate of inflation is negative, so it does not make sense to keep your money in treasury bills anymore,\u201d he pointed out.<\/p>\n<figure class=\"wp-block-embed is-type-rich is-provider-embed-handler wp-block-embed-embed-handler wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<p><div class=\"youtube-embed\" data-video_id=\"yO73Vk3BmF8\"><iframe loading=\"lazy\" title=\"It does not make sense any longer to buy treasury bills - Prof Lord Mensah\" width=\"696\" height=\"392\" src=\"https:\/\/www.youtube.com\/embed\/yO73Vk3BmF8?feature=oembed&#038;enablejsapi=1\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/div>\n<\/p>\n<\/figure>\n<p>His concern is in the wake of the high cost of inflation and the continual depreciation of the Cedi.<\/p>\n<p>A\u00a0recent currency performance ranking by Bloomberg has classified the Cedi as the worst-performing currency across the globe after Sri Lanka\u2019s Rupee.<\/p>\n<p>Bloomberg tracked the performance of 150 currencies in the world and the Cedi placed last but one in terms of performance since the beginning of the year.<\/p>\n<p>In less than 8 months, the Cedi has come under intense exchange rate pressure due to its continuous depreciation in relation to some major international currencies such as the Dollar, Pound and Euro.<\/p>\n<p>He, however, advised that the best way to keep investment is to \u201cbuy the dollar and store it.\u201d<\/p>\n<p>He added that for this reason, he will not fault the Bank of Ghana for increasing the monetary policy rate. This, he stated, is because the Bank wants to discourage investment in treasury bills.<\/p>\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-myjoyonline-com wp-block-embed-myjoyonline-com\"\/>\n<p>Meanwhile, the Bank of Ghana has increased the policy rate by 300 basis points to 22%, after an Emergency Monetary Policy Committee meeting today, August 17<sup>th<\/sup>, 2022.<\/p>\n<p>The move is part of measures to address the risks to the inflation outlook.<\/p>\n<p>However, cost of borrowing is expected to go up significantly, and consequently increase cost of living and doing business.<\/p>\n<p><strong>Additional measures<\/strong><\/p>\n<p>The MPC also took additional measures  raising the primary reserve requirement of banks from 12% to 15% to be implemented in a phased manner.<\/p>\n<p>Therefore, the reserve requirement will go up to 13% from September 1st, 2022 and subsequently to 14% by October 1st, 2022 and then 15% by November 1<sup>st<\/sup>, 2022.<\/p>\n<p><strong>Strengthening cedi<\/strong><\/p>\n<p>To boost the supply of foreign exchange to the economy, the Bank of Ghana, said it is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies.<\/p>\n<p>This it believes will strengthen the central bank\u2019s foreign exchange auctions, and consequently the cedi.<\/p>\n<p>                <!-- Post Tags --><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Economist at the University of Ghana Business School, Prof Lord Mensah, says it does not make sense any longer for investors to buy treasury bills. According to him, Ghana has gotten to a point where \u201cthe Cedi deteriorates against the Dollar where people start seeing the Dollar as a store of value.\u201d Speaking in an [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1182077,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187],"tags":[4524,5713,3254,3750,2124,2280,5722,9234],"class_list":["post-1182075","post","type-post","status-publish","format-standard","has-post-thumbnail","category-politics","tag-bills","tag-buy","tag-longer","tag-lord","tag-mensah","tag-prof","tag-sense","tag-treasury"],"_links":{"self":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1182075","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/comments?post=1182075"}],"version-history":[{"count":0,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/posts\/1182075\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/media?parent=1182075"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/categories?post=1182075"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ghanamma.com\/2022\/wp-json\/wp\/v2\/tags?post=1182075"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}