Professor of Economics at the Institute of Statistical,
Social and Economic Research (ISSER), Peter Quartey, has described as a move in
the right direction, the decision by the Bank of Ghana to use six hundred and
seventy million dollars ($670,000,000) to stabilize the cedi.
The Governor of the Bank of Ghana, Dr Ernest Addison revealed that the amount
was used between 2017 and 2018 to strengthen the cedi’s value against other
international currencies.
The cedi has depreciated by 11 percent between January last year and the same
period this year.
In an interview with Citi Business News, Professor Quartey lauded the move and
said the decision by the BoG saved the cedi from experiencing further
depreciation against the dollar and other international currencies during the
periods of 2017 and 2018.
“The Central Bank in its wisdom will look at the demand and the supply for
foreign currency and then it will intervene as and when the need arises by
doing sometimes what they refer to as the management of the system although
it’s a floating rate system sometimes they have to intervene when you think the
fundamentals are not right or sense something is going against the exchange
rate because there is excess demand over supply”, he stated.
He added, “Now if you don’t intervene it can have severe repercussions on the
private sector. Import duties will go up, cost of production and cost of living
will go up so the Central Bank has to intervene as and when the need arises”.
He however urged the country’s economic management team to put in place long
term measures to deal with the depreciation of the cedi.
“These are temporary measures, they are not long term solutions, the long term
solutions will be for us to grow the real sector if we produce a lot of the
things that we consume, we don’t have to demand foreign exchange and that for
me will solve the problem”.
Professor Quartey advised the economic management team to do more to reduce
imports to the country.
“So, the managers of the economy will have to ensure that we grow the real
sectors of the economy, that is more sustainable than temporary interventions
as and when the need arises. It is done it is needful but the long term
intervention will be to grow the real sector”.
citibusiness
