Dr. Abdul Nashir Issahaku
Governor of the Bank of Ghana (BoG), Dr. Abdul Nashir Issahaku, says the local currency cedi is actually stabilizing when compared to 2015 and the previous election years.
However, some economists, including the Vice Presidential candidate of the New Patriotic Party (NPP), Dr. Mahamadu Bawumia, recently described the cedi as one of the worst performing currencies in the world as a result of weak fundamentals and some misguided policies of the Central Bank.
Dr Bawumia said the Cedi has performed badly during the tenure of President John Mahama.
The Cedi appeared to have experienced some stability for some time now.
Currently, the local currency has been trading at almost GH¢3.99 to the US dollar at the forex bureau and GH¢3.93 on the interbank market.
Addressing the last Monetary Policy Committee (MPC) press briefing for the year 2016, Dr. Abdul Nashir Issahaku, Governor of the Bank of Ghana (BoG) said, “The cedi is actually stabilizing when compared to last year and the previous election years.
“Stabilizing means there is improved performance of the currency given what we expected in an election year. And what we are seeing is a remarkable performance of the currency compared to last year when it was about 15.5 percent depreciation.”
The Governor attributed the stability of the cedi to the tight monetary stance and recent issuance of Eurobonds, explaining that these have boosted reserves and improved liquidity in the forex market.
The Central Bank was able to intervene in the market when the cedi was earlier experiencing some volatility, we anticipated the volatilities but we intervened in the market to moderate the volatilities. There are also forex exchange reforms ongoing that also helps to support the stability of the cedi, he indicated.
Out of 25 Sub-Saharan African currencies captured by Ecobank Research in May, this year, the Ghana cedi was the 7th worst performing currency in Africa despite the relative stability against the dollar in the first quarter of this year.
By Cephas Larbi
cephrok@yahoo.com