Economist and Finance Professor at the University of Ghana, Godfred Bokpin, has stated that stabilizing the cedi between GH₵10 and GH₵12 is the correct approach for Ghana’s economy, highlighting the importance of predictability over abrupt changes.
During a discussion on the value of the cedi on Joy FM’s Super Morning Show, Prof. Bokpin pointed out that the Central Bank has long sought to manage the exchange rate, even if this was not initially shared with the public.
“I mentioned earlier that the central bank was targeting the exchange rate. They chose not to inform the market about this at the beginning, so it wasn’t just a recent decision made in a meeting. They had a clear direction in mind,” he clarified.
He further explained that the recent strengthening of the cedi was not solely a result of natural market dynamics but also involved direct interventions.
“That’s why we stated that the strengthening of the local currency was not merely due to supply and demand. There were interventions that contributed to this strengthening,” he noted.
Prof. Bokpin contended that the rate of appreciation was too rapid, making it challenging for businesses and the overall economy to adapt properly.
“We confirmed that the pace of facilitation was too swift for effective planning and for the entire economy to adjust to the currency’s strengthening. Therefore, it cannot be labeled as stability. It was more of a disruption. Such disruption can lead to both negative and positive outcomes, making it hard for people to adapt or even plan. It was quite disconcerting,” he remarked.
He disclosed that some stakeholders had predicted that the cedi would eventually stabilize around GH₵10, give or take, as early as a month ago. For him, the priority moving forward is to achieve true and lasting stability.
Source: HotFmOnline.com
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