The Bank of Ghana has assured the public the fundamentals of the economy is sound and strong, despite recent depreciation of the Cedi.
Speaking at “The Cedi Forum” to discuss the depreciation of the local currency, the head of Financial Markets and Treasury Stephen Opata pointed out that the Central Bank has a firm grip on the issues.
He said the depreciation of the Cedi is temporary, promising that measures such as “adequate reserves” have been put in place to address the shocks.
“We’re providing liquidity to the banking systems to meet the shocks,” Opata stated on Thursday, 13 September 2018.
He added: “We’re trying to ensure that there is a lot of liquidity in the banking system. The shocks will come, but the BoG will always be there to manage it. The important thing is to make the economy attractive.”
“According to our analysis this currency is well aligned. We’re not too strong and not to weak. We’ve had a good year and based on the fundamentals, we were expecting to have a better year until recently,” Mr. Opata asserted.
Mr. Opata, who is also in charge of Treasury at the Central Bank, observed that “there has been significant turnaround in the fundamentals of the Cedi starting from 2017 to 2018.”
Admitting that “there has been some depreciation” in the last couple of weeks, Mr. Opata argued “it is not the worst we’ve seen.” “The BoG is trying to live to expectation of Ghanaians in terms of achieving stability. We should not worry. We’re on the right track,” Mr. Opata assured.
No cause for concern
At the same time, a Senior Research Fellow at the Institute for Fiscal Studies (IFS), Dr Said Boakye, has expressed confidence in the managers of the economy, allaying fears the recent depreciation of the local currency will lead to economic meltdown.
The Ghana Cedi in recent times has depreciated marginally against major international currencies, especially the US dollar causing fears within the business community.
However, Dr. Boakye submitted the shocks are normal, urging the general public to have confidence in the Central Bank to manage the situation in no time. “There is no cause for alarm,” the IFS fellow assured at the public dialogue.
He said: “We can’t talk about a problem without talking about the integrity of it. From the beginning of the year, the Cedi has depreciated by just about 6.5%.” In his view this is far below the average depreciation of the Cedi which stand at 11% for the periods spanning 1993 to date.
“The Cedi is not as weak as we think, so I don’t think that all the hullabaloo is necessary. I don’t think all the noise is necessary,” Dr. Boakye stressed.
“The current discussion on Cedi depreciation is premature. The Cedi is performing averagely well,” the economist, who has been an ardent critic of the Akufo-Addo government, posited.